87th LegislatureEnergyState HouseTexas House Priority Electricity-Related Reform Bills Pass Overwhelmingly

The Texas House's set of electricity priority bills passed first muster on Tuesday and will now be up for final passage on Wednesday.
March 30, 2021
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Six of the seven power grid-related priority bills in the Texas House received a warm welcome on the floor on Tuesday.

The slate of legislation comes in direct response to the February winter storm and electricity blackouts which vaulted the Electric Reliability Council of Texas (ERCOT) from obscurity to household name status.

In laying out the slate of bills, Rep. Chris Paddie (R-Marshall) prefaced floor discussion by saying, “There is no silver bullet to fix the problems from last month, but this is a good starting point.”

The bills approved were:

  • House Bill (HB) 10 ‒ Requirement that ERCOT board members and CEO live in Texas and replace unaffiliated board with members appointed by various state officials.
  • HB 11 ‒ “Weatherization” requirement that the power industry protects equipment and infrastructure against sub-10-degree temperatures.
  • HB 12 ‒ Establishment of a Statewide Disaster Alert System.
  • HB 13 ‒ Establishment of a Texas Energy Disaster Reliability Council comprised of representatives from the Public Utility Commission (PUC), Railroad Commission, and ERCOT.
  • HB 16 ‒ Prohibition on residential use of wholesale price indexed electricity plans, such as those previously offered by companies like Griddy.
  • HB 17 ‒ Forbiddance of localities from prohibiting grid connection for consumers based on the planned energy source.

After passage, Speaker Dade Phelan (R-Beaumont) stated, “The Texas House today took important first steps in passing critical, essential reforms in the aftermath of Winter Storm Uri.”

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“The House’s legislative package will reform ERCOT, ensure the reliability of our grid in extreme weather conditions, defend ratepayers, and improve coordination during times of crisis.”

The first four bills boasted unanimous support and while the last two were a bit more divided, they still passed comfortably.

An amendment by Rep. Cody Vasut (R-Angleton) attempted to narrow the residency requirement in HB 10 to within the ERCOT region itself, rather than just Texas. While the ERCOT grid covers about 90 percent of the state, there are regions that fall into other grid systems.

Paddie spoke against the amendment, believing that it could unnecessarily restrict the available pool of expertise and that in-state residency itself solved the concerns from which this bill is derived. The proposal was withdrawn after Paddie’s opposition.

Another amendment to HB 10 by Rep. Trey Martinez Fischer (D-San Antonio) tried to attach reforms to the PUC onto the legislation. It would have expanded the commission to five members and made each position elected statewide rather than appointed by the governor.

In the bill layout, an exchange between Paddie and Rep. Chris Turner (D-Fort Worth) emphasized that these bills were ERCOT-related only and that legislation reforming the PUC would come before the body later on.

Rep. Eddie Lucio III (D-Brownsville) called a point of order against the amendment, first expressing his support for its general purpose, on the grounds that it wasn’t germane to the bill’s topic.

The last bill of the day, HB 17, faced far more opposition than its predecessors. Aimed at local prohibitions on specific energy sources, like when Berkeley outlawed natural gas usage in new construction, Rep. Joe Deshotel’s (D-Beaumont) legislation forbids political subdivisions from taking such actions.

An amendment proposed by Turner aimed to allow localities to decide which kind of energy source could be used in powering their own property and to provide rebate incentives to certain energy sources provided were not banned outright.

It was challenged on a point of order by Rep. Briscoe Cain (R-Deer Park) which was sustained by the chair, effectively killing the amendment.

Other slight additions include a requirement that critical infrastructure with its own generation be identified so it can be brought offline and free up room for load without backups and the ability for utilities to plan ahead with commercial consumers, like they already do with industrials, to shut down in times of stressed electricity supply.

The bills must now be voted on once more during third reading, a parliamentary requirement, before they can be sent over to the senate.

On Monday, the state Senate also approved its own ERCOT-related overhaul in one quasi-omnibus bill. Senate Bill 3, under one umbrella, compiled many of the things the House’s slate addressed today, including:

  • Creation of an emergency alert system;
  • Mandate of infrastructure weatherization;
  • Creation of the Texas Electric Reliability Council;
  • Prohibition wholesale indexed plans for residential and small commercial customers;
  • Directive to create of emergency plan(s).

It also goes further than the House’s slate, such as setting a system-wide wholesale price offer cap and prohibiting ancillary service prices from exceeding 150 percent of the wholesale cap. Ancillary service prices — generation paid to come on at points lacking in regularly expected generation — reached upwards of $26,000 per megawatt-hour (MWh) last month.

The wholesale cap was set at $9,000 MWh during the event.

Neither chamber has not yet finished dealing with legislation aimed at last month’s record winter storm and the calamity wrought.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.