88R14150 JXC-D
	By: Campbell	S.B. No. 2369

	A BILL TO BE ENTITLED
	AN ACT
	relating to the reliability and resiliency of the power grid in this
	state; authorizing the issuance of revenue bonds.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  The Public Utility Commission of Texas may not
	adopt a program that requires load serving entities to purchase
	credits earned by generators based on generator availability during
	times of high demand and low supply at a centrally determined
	clearing price.
	SECTION 2.  Section 35.004, Utilities Code, is amended by
	adding Subsection (i) to read as follows:
	(i)  The commission shall require the independent
	organization certified under Section 39.151 for the ERCOT power
	region to implement real-time co-optimization of energy and
	ancillary services in the ERCOT wholesale market.
	SECTION 3.  Title 4, Utilities Code, is amended by adding
	Subtitle C to read as follows:
	SUBTITLE C.  RELIABILITY AND RESILIENCY OF POWER GRID
	CHAPTER 201.  GENERAL PROVISIONS
	Sec. 201.001.  DEFINITIONS. In this subtitle:
	(1)  "Advisory committee" means the utilities
	reliability fund advisory committee.
	(2)  "Commission" means the Public Utility Commission
	of Texas.
	(3)  "Electric utility" has the meaning assigned by
	Section 31.002, except that the term includes an electric
	cooperative organized under Chapter 161 and a municipally owned
	utility.
	(4)  "Fund" means the utilities reliability fund.
	(5)  "Historically underutilized business" has the
	meaning assigned by Section 2161.001, Government Code.
	(6)  "Power generation company" has the meaning
	assigned by Section 31.002.
	(7)  "Revenue fund" means the utilities reliability
	revenue fund.
	(8)  "Trust company" means the Texas Treasury
	Safekeeping Trust Company.
	CHAPTER 202.  UTILITIES RELIABILITY FUND
	Sec. 202.001.  FUND. (a)  The utilities reliability fund is
	a special fund in the state treasury outside the general revenue
	fund to be used by the commission as authorized by this chapter
	without further legislative appropriation.  The commission may
	establish separate accounts in the fund and may transfer funds
	between accounts. The commission may invest, reinvest, and direct
	the investment of money in the fund.  The fund and the fund's
	accounts may be kept and held by the trust company for and in the
	name of the commission. The commission has legal title to money and
	investments in the fund until money is disbursed from the fund as
	provided by this chapter and commission rules.
	(b)  Money deposited to the credit of the fund may be used
	only as provided by Section 202.003.
	(c)  The fund consists of:
	(1)  money appropriated to the fund;
	(2)  money transferred or deposited to the credit of
	the fund by law, including money from any source transferred or
	deposited to the credit of the fund at the commission's discretion
	as authorized by law;
	(3)  the proceeds of any fee or tax imposed by this
	state that by statute is dedicated for deposit to the credit of the
	fund;
	(4)  any other revenue that the legislature by statute
	dedicates for deposit to the credit of the fund;
	(5)  investment earnings and interest earned on amounts
	credited to the fund;
	(6)  repayments of loans made from the fund; and
	(7)  money transferred to the fund from another fund or
	account to which money from the fund was transferred.
	Sec. 202.002.  MANAGEMENT AND INVESTMENT OF FUND. (a)  The
	commission or the trust company may hold and invest the fund, and
	any accounts established in the fund, for and in the name of the
	commission, taking into account the purposes for which money in the
	fund may be used.  The fund may be invested with the state treasury
	pool.
	(b)  The overall objectives for the investment of the fund
	are, in order of precedence:
	(1)  preservation and safety of the fund principal;
	(2)  liquidity; and
	(3)  investment yield.
	(c)  The commission or the trust company, as directed by the
	commission, has any power necessary to accomplish the purposes of
	managing and investing the assets of the fund. In managing the
	assets of the fund, through procedures and subject to restrictions
	the commission or the trust company considers appropriate, the
	commission or 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)  If the fund is managed by the trust company, the trust
	company may charge fees to cover its costs incurred in managing and
	investing the fund. The fees must be consistent with the fees the
	trust company charges other state and local governmental entities
	for which the trust company provides investment management
	services. The trust company may recover fees the trust company
	charges under this subsection only from the earnings of the fund.
	(e)  If the fund is managed by the trust company, the trust
	company annually shall provide a report to the commission and to the
	advisory committee with respect to the investment of the fund. The
	trust company shall contract with a certified public accountant to
	conduct an independent audit of the fund annually and shall present
	the results of each annual audit to the commission and to the
	advisory committee. This subsection does not affect the state
	auditor's authority to conduct an audit of the fund under Chapter
	321, Government Code.
	(f)  The commission or trust company shall adopt a written
	investment policy that is appropriate for the fund. If the fund is
	managed by the trust company:
	(1)  the trust company shall present the investment
	policy to the commission and the investment advisory board
	established under Section 404.028, Government Code; and
	(2)  the commission and investment advisory board shall
	submit to the trust company recommendations regarding the policy.
	(g)  If the fund is managed by the trust company, the
	commission annually shall provide to the trust company a forecast
	of the cash flows into and out of the fund. The commission shall
	provide updates to the forecasts as appropriate to assist the trust
	company in achieving the objectives specified by Subsection (b).
	(h)  If the fund is managed by the trust company, the company
	shall disburse money from the fund as directed by the commission.
	The commission shall direct disbursements from the fund on a
	schedule specified by the commission.  If any applicable revenue
	bonds are outstanding, the commission shall direct disbursements
	from the fund not more frequently than twice in any state fiscal
	year.
	(i)  An investment-related contract entered into under this
	section is not subject to Chapter 2260, Government Code.
	Sec. 202.003.  USE OF FUND; PAYMENTS TO AND FROM OTHER FUNDS
	OR ACCOUNTS. (a)  The commission or the trust company at the
	direction of the commission shall make disbursements from the fund
	to the revenue fund in the amounts the commission determines are
	needed for disbursement through the financing structures developed
	to meet the goals of the fund, including transfer of those amounts
	to other commission programs or funds as necessary, or for debt
	service payments on or security provisions of the commission's
	revenue bonds, after considering all other sources available for
	those purposes.
	(b)  The fund may be used only to:
	(1)  enhance the reliability and resiliency of the
	power grid in this state by installing dispatchable generation
	capacity;
	(2)  pay the necessary and reasonable expenses of the
	commission in administering the fund; and
	(3)  transfer funds to other programs or funds.
	(c)  The commission may provide financial assistance from
	the fund for:
	(1)  an electric utility project; or
	(2)  a power generation company project.
	(d)  Financial assistance under Subsection (c) may be
	provided in any form as determined by the commission, including a
	market rate, low-interest, or no-interest loan, a loan guarantee,
	an equity ownership in a public or private entity, a joint venture
	with a public or private entity, a grant, an interest rebate, or an
	interest subsidy.  The commission may not provide more than two
	loans from the fund to the same entity.
	(e)  In providing financial assistance under Subsection (c),
	the commission may make, enter into, and enforce contracts,
	agreements, including management agreements, for the management of
	any of the commission's property, leases, indentures, mortgages,
	deeds of trust, security agreements, pledge agreements, credit
	agreements, overrides or other revenue sharing mechanisms,
	repurchase agreements, and other instruments with any person,
	including any lender and any federal, state, or local governmental
	agency, and to take other actions as may accomplish any of its
	purposes.
	(f)  The commission may contract with and provide for the
	compensation of consultants and agents, including engineers,
	attorneys, management consultants, financial advisors, indexing
	agents, and other experts, as the business of the commission under
	this chapter may require.
	(g)  Money in the fund may not be used for the purposes of
	certification under Section 403.121, Government Code.
	Sec. 202.004.  PRIORITIZATION OF PROJECTS BY COMMISSION.
	(a)  The commission, for the purpose of providing financial
	assistance under this chapter, shall prioritize projects that
	enhance the reliability and resiliency of the power grid in this
	state.
	(b)  The commission shall establish a point system for
	prioritizing projects for which financial assistance is sought from
	the commission. The system must include a standard for the
	commission to apply in determining whether a project qualifies for
	financial assistance at the time the application for financial
	assistance is filed with the commission.
	(c)  The commission may consider the following criteria in
	prioritizing projects:
	(1)  other funding sources secured by the applicant for
	the project, including any capital to be provided by the applicant;
	(2)  the financial capacity of the applicant to repay
	the financial assistance provided; and
	(3)  the ability of the applicant to timely leverage
	state financing with local, federal, or private funding.
	(d)  The commission shall consider federal tax subsidies in
	prioritizing projects.
	Sec. 202.005.  ADVISORY COMMITTEE. (a)  The utilities
	reliability fund advisory committee is composed of the following
	members:
	(1)  the comptroller, or a person designated by the
	comptroller;
	(2)  three members of the senate appointed by the
	lieutenant governor, including:
	(A)  a member of the committee of the senate
	having primary jurisdiction over matters relating to finance; and
	(B)  a member of the committee of the senate
	having primary jurisdiction over natural resources;
	(3)  three members of the house of representatives
	appointed by the speaker of the house of representatives,
	including:
	(A)  a member of the committee of the house of
	representatives having primary jurisdiction over appropriations;
	and
	(B)  a member of the committee of the house of
	representatives having primary jurisdiction over natural
	resources;
	(4)  the chief executive of the Office of Public
	Utility Counsel, or a person designated by the chief executive of
	the Office of Public Utility Counsel;
	(5)  the presiding officer of the commission, or a
	person designated by the presiding officer of the commission;
	(6)  the chair of the Texas Reliability Entity board of
	directors, or a person designated by a public vote of the Texas
	Reliability Entity; and
	(7)  an unaffiliated board member of the Electric
	Reliability Council of Texas, appointed in a public meeting of the
	Electric Reliability Council of Texas.
	(b)  The commission shall provide staff as necessary to
	assist the advisory committee.
	(c)  An appointed member of the advisory committee serves at
	the will of the officer who appointed the member.
	(d)  The lieutenant governor shall appoint a co-presiding
	officer of the advisory committee from among the members appointed
	by the lieutenant governor, and the speaker of the house of
	representatives shall appoint a co-presiding officer of the
	committee from among the members appointed by the speaker.
	(e)  The advisory committee shall hold public hearings,
	formal meetings, or work sessions in a location with audio and video
	capacity. The commission shall broadcast over the Internet live
	video and audio of each public hearing, formal meeting, or work
	session of the advisory committee and provide access to each
	broadcast on the commission's Internet website.  Either
	co-presiding officer of the advisory committee may call a public
	hearing, formal meeting, or work session of the advisory committee
	after issuing a public notice not later than the seventh day before
	the date of the public hearing, formal meeting, or work session.
	The public notice must include an agenda with formal actions
	included. The advisory committee may not take formal action at a
	public hearing, formal meeting, or work session unless a quorum of
	the committee is present. The commission shall provide access on
	the commission's Internet website to the public notices, recordings
	of the live broadcasts, and minutes of public hearings, formal
	meetings, and work sessions.
	(f)  Except as otherwise provided by this subsection, a
	member of the advisory committee is not entitled to receive
	compensation for service on the committee or reimbursement for
	expenses incurred in the performance of official duties as a member
	of the committee.  Service on the advisory committee by a member of
	the senate or house of representatives is considered legislative
	service for which the member is entitled to reimbursement and other
	benefits in the same manner and to the same extent as for other
	legislative service.
	(g)  The advisory committee shall submit comments and
	recommendations to the commission regarding the use of money in the
	fund and in the revenue fund for use by the commission in adopting
	rules under Section 202.006 and in adopting policies and procedures
	under Section 202.008. The submission must include:
	(1)  comments and recommendations on rulemaking
	related to the prioritization of projects in accordance with
	Section 202.004;
	(2)  comments and recommendations on rulemaking
	related to establishing standards for determining whether projects
	meet the criteria provided by Section 202.003;
	(3)  an evaluation of the available programs for
	providing financing for projects authorized by this chapter and
	guidelines for implementing those programs;
	(4)  an evaluation of the lending practices of the
	commission and guidelines for lending standards;
	(5)  an evaluation of the use of funds by the commission
	to provide support for financial assistance for projects that
	enhance the reliability and resiliency of the power grid in this
	state;
	(6)  an evaluation of methods for encouraging
	participation in the programs established under this chapter by
	companies domiciled in this state or that employ a significant
	number of residents of this state; and
	(7)  an evaluation of the overall operation, function,
	and structure of the fund.
	(h)  The advisory committee shall review the overall
	operation, function, and structure of the fund at least
	semiannually and may provide comments and recommendations to the
	commission on any matter.
	(i)  The advisory committee may adopt rules, procedures, and
	policies as needed to administer this section and implement its
	responsibilities.
	(j)  Chapter 2110, Government Code, does not apply to the
	size, composition, or duration of the advisory committee.
	(k)  The advisory committee is subject to Chapter 325,
	Government Code (Texas Sunset Act). Unless continued in existence
	as provided by that chapter, the advisory committee is abolished
	and this section expires September 1, 2035.
	(l)  The advisory committee shall make recommendations to
	the commission regarding information to be posted on the
	commission's Internet website under Section 202.007(b).
	(m)  The commission shall provide an annual report to the
	advisory committee on:
	(1)  the commission's compliance with statewide annual
	goals relating to historically underutilized businesses; and
	(2)  the participation level of historically
	underutilized businesses in projects that receive funding under
	this chapter.
	(n)  If the aggregate level of participation by historically
	underutilized businesses in projects that receive funding under
	this chapter does not meet statewide annual goals adopted under
	Chapter 2161, Government Code, the advisory committee shall make
	recommendations to the commission to improve the participation
	level.
	Sec. 202.006.  RULES. (a)  The commission shall adopt rules
	providing for the use of money in the fund that are consistent with
	this subchapter, including rules:
	(1)  establishing standards for determining whether
	projects meet the criteria provided by Section 202.003;
	(2)  providing for public access to information on
	financing assistance applications and providing for consideration
	of public comment before financing decisions are made; and
	(3)  specifying the manner for prioritizing projects
	for purposes of Section 202.004.
	(b)  The commission shall give full consideration to the
	recommendations of the advisory committee before adopting rules
	under this chapter.
	Sec. 202.007.  REPORTING AND TRANSPARENCY REQUIREMENTS. (a)
	Not later than December 1 of each even-numbered year, the
	commission shall provide a report to the governor, lieutenant
	governor, speaker of the house of representatives, and members of
	the legislature regarding the use of the fund.
	(b)  The commission shall post on the commission's Internet
	website a description of each project funded through the fund,
	including the expected date of completion of the project.
	Sec. 202.008.  POLICIES AND PROCEDURES TO MITIGATE OR
	MINIMIZE ADVERSE EFFECTS OF CERTAIN FEDERAL LAWS. The commission
	shall adopt, and may amend from time to time at the commission's
	discretion, policies and procedures for the purpose of mitigating
	or minimizing the adverse effects, if any, of federal laws and
	regulations relating to income taxes, arbitrage, rebates, and
	related matters that may restrict the commission's ability to
	freely invest all or part of the fund or to receive and retain all
	the earnings from the fund.
	Sec. 202.009.  PUBLIC PRIVATE PARTNERSHIPS. Money from the
	fund may be used to make payments under a public and private entity
	agreement to design, develop, finance, or construct a project
	described by this chapter.
	CHAPTER 203. UTILITIES RELIABILITY REVENUE FUND
	Sec. 203.001.  REVENUE FUND. (a)  The utilities reliability
	revenue fund is a special fund in the state treasury outside the
	general revenue fund to be used by the commission as authorized by
	this chapter without further legislative appropriation. The
	commission may establish separate accounts in the revenue fund and
	may transfer money between accounts. The commission has legal
	title to money and investments in the revenue fund until the money
	is disbursed as provided by this chapter and commission rules.
	(b)  Money deposited to the credit of the revenue fund may be
	used only as provided by Section 203.003.
	(c)  The revenue fund consists of:
	(1)  money appropriated to the revenue fund;
	(2)  money transferred or deposited to the credit of
	the revenue fund by law, including money from any source
	transferred or deposited to the credit of the revenue fund at the
	commission's discretion as authorized by law;
	(3)  the proceeds of any fee or tax imposed by this
	state that by statute is dedicated for deposit to the credit of the
	revenue fund;
	(4)  any other revenue that the legislature by statute
	dedicates for deposit to the credit of the revenue fund;
	(5)  investment earnings and interest earned on amounts
	credited to the revenue fund;
	(6)  the proceeds from the sale of revenue bonds issued
	by the commission under this chapter that are designated by the
	commission for the purpose of providing money for the revenue fund;
	(7)  repayments of loans made from the revenue fund;
	and
	(8)  money disbursed to the revenue fund from the
	utilities reliability fund as authorized by Section 202.003.
	Sec. 203.002.  MANAGEMENT AND INVESTMENT OF REVENUE FUND.
	(a)  Money deposited to the credit of the revenue fund shall be
	invested as determined by the commission. The revenue fund may be
	invested with the state treasury pool.
	(b)  The revenue fund and any accounts established in the
	revenue fund shall be kept and maintained by or at the direction of
	the commission.
	(c)  At the direction of the commission, the revenue fund and
	any accounts established in the revenue fund may be managed by the
	commission, the comptroller, or a corporate trustee that is a trust
	company or a bank that has the powers of a trust company for and on
	behalf of the commission and, pending use of the revenue fund and
	accounts for the purposes provided by this chapter, may be invested
	as provided by an order, resolution, or rule of the commission.
	(d)  The commission, comptroller, or corporate trustee shall
	manage the revenue fund in strict accordance with this chapter and
	the orders, resolutions, and rules of the commission.
	Sec. 203.003.  USE OF REVENUE FUND. (a)  Money in the
	revenue fund may be used by the commission only to provide financial
	assistance under terms specified by the commission for projects
	that enhance the reliability and resiliency of the power grid in
	this state by installing dispatchable generation capacity.
	(b)  Financial assistance for projects under Subsection (a)
	may be provided in any form determined by the commission that meets
	the needs and goals of this state and the applicants, including a
	market rate, low-interest, or no-interest loan, loan guarantee,
	equity ownership in a public or private entity, a joint venture with
	a public or private entity, a grant, an interest rebate, or an
	interest subsidy.
	(c)  In providing financial assistance under Subsection (a),
	the commission may:
	(1)  make, enter into, and enforce contracts and
	agreements, including management agreements, for the management of
	any of the commission's property, leases, indentures, mortgages,
	deeds of trust, security agreements, pledge agreements, credit
	agreements, overrides or other revenue sharing mechanisms,
	repurchase agreements, and other instruments with any person,
	including any lender and any federal, state, or local governmental
	agency;
	(2)  contract with and provide for the compensation of
	consultants and agents, including engineers, attorneys, management
	consultants, financial advisors, indexing agents, and other
	experts, as the business of the commission may require; and
	(3)  take other actions to accomplish any of the
	commission's purposes.
	(d)  The commission may use money in the revenue fund:
	(1)  as a source of revenue or security for the payment
	of the principal of and interest on revenue bonds issued by the
	commission under this chapter;
	(2)  to pay the necessary and reasonable expenses of
	paying agents, bond counsel, and financial advisory services and
	similar costs incurred by the commission in administering the
	revenue fund; or
	(3)  to transfer money to the fund as necessary.
	(e)  The commission, comptroller, or corporate trustee
	managing the revenue fund at the direction of the commission shall
	withdraw from the revenue fund and pay to a person any amounts, as
	determined by the commission, for the timely payment of:
	(1)  the principal of and interest on bonds described
	by Subsection (d)(1) that mature or become due; and
	(2)  any cost related to bonds described by Subsection
	(d)(1) that become due, including payments under related credit
	agreements.
	(f)  Money in the revenue fund may not be used for the purpose
	of certification under Section 403.121, Government Code.
	Sec. 203.004.  ISSUANCE OF REVENUE BONDS. (a)  The
	commission may issue revenue bonds for the purpose of providing
	money for the revenue fund.
	(b)  The commission may issue revenue bonds to refund revenue
	bonds or bonds and obligations issued or incurred in accordance
	with other provisions of law.
	(c)  Revenue bonds issued under this chapter are special
	obligations of the commission payable only from and secured by
	designated income and receipts of the revenue fund, or of one or
	more accounts in the revenue fund, including principal of and
	interest paid and to be paid on revenue fund assets or income from
	accounts created within the revenue fund by the commission, as
	determined by the commission.
	(d)  Revenue bonds issued under this chapter do not
	constitute indebtedness of the state as prohibited by the
	constitution.
	(e)  The commission may require revenue fund participants to
	make charges, levy taxes, or otherwise provide for sufficient money
	to pay acquired obligations.
	(f)  Revenue bonds issued under this chapter must be
	authorized by resolution of the commission and must have the form
	and characteristics and bear the designations as the resolution
	provides.
	(g)  Revenue bonds issued under this chapter may:
	(1)  bear interest at the rate or rates payable
	annually or otherwise;
	(2)  be dated;
	(3)  mature at the time or times, serially, as term
	revenue bonds, or otherwise in not more than 50 years from their
	dates;
	(4)  be callable before stated maturity on the terms
	and at the prices, be in the denominations, be in the form, either
	coupon or registered, carry registration privileges as to principal
	only or as to both principal and interest and as to successive
	exchange of coupon for registered bonds or one denomination for
	bonds of other denominations, and successive exchange of registered
	revenue bonds for coupon revenue bonds, be executed in the manner,
	and be payable at the place or places inside or outside the state,
	as provided by the resolution;
	(5)  be issued in temporary or permanent form;
	(6)  be issued in one or more installments and from time
	to time as required and sold at a price or prices and under terms
	determined by the commission to be the most advantageous reasonably
	obtainable; and
	(7)  be issued on a parity with and be secured in the
	manner as other revenue bonds authorized to be issued by this
	chapter or may be issued without parity and secured differently
	than other revenue bonds.
	(h)  All proceedings relating to the issuance of revenue
	bonds issued under this chapter shall be submitted to the attorney
	general for examination. If the attorney general finds that the
	revenue bonds have been authorized in accordance with law, the
	attorney general shall approve the revenue bonds, and the revenue
	bonds shall be registered by the comptroller. After the approval
	and registration, the revenue bonds are incontestable in any court
	or other forum for any reason and are valid and binding obligations
	in accordance with their terms for all purposes.
	(i)  The proceeds received from the sale of revenue bonds
	issued under this chapter may be deposited or invested in any manner
	and in such investments as may be specified in the resolution or
	other proceedings authorizing those obligations. Money in the
	revenue fund or accounts created by this chapter or created in the
	resolution or other proceedings authorizing the revenue bonds may
	be invested in any manner and in any obligations as may be specified
	in the resolution or other proceedings.
	Sec. 203.005.  CHAPTER CUMULATIVE OF OTHER LAWS. (a)  This
	chapter is cumulative of other laws on the subject, and the
	commission may use provisions of other applicable laws in the
	issuance of bonds and other obligations, but this chapter is wholly
	sufficient authority for the issuance of bonds and other
	obligations and the performance of all other acts and procedures
	authorized by this chapter.
	(b)  In addition to other authority granted by this chapter,
	the commission may exercise the authority granted to the governing
	body of an issuer with regard to the issuance of obligations under
	Chapter 1371, Government Code.
	SECTION 4.  As soon as practicable after the effective date
	of this Act, the lieutenant governor and the speaker of the house of
	representatives shall appoint the initial appointive members of the
	utilities reliability fund advisory committee as provided by
	Section 202.005, Utilities Code, as added by this Act.
	SECTION 5.  (a)  Not later than June 1, 2025, the utilities
	reliability fund advisory committee shall submit recommendations
	to the Public Utility Commission of Texas on the rules to be adopted
	by the commission under Section 202.006(a), Utilities Code, as
	added by this Act.
	(b)  Not later than December 1, 2025, the commission shall
	adopt rules under Section 202.006, Utilities Code, as added by this
	Act.
	SECTION 6.  The Public Utility Commission of Texas shall
	post the information described by Section 202.007(b), Utilities
	Code, as added by this Act, on the commission's Internet website not
	later than March 1, 2024.
	SECTION 7.  This Act takes effect on the date on which the
	constitutional amendment proposed by the 88th Legislature, Regular
	Session, 2023, creating the utilities reliability fund and the
	utilities reliability revenue fund to provide financial support for
	projects that enhance the reliability and resiliency of the power
	grid in this state takes effect.  If that amendment is not approved
	by the voters, this Act has no effect.