The 87th Regular Session of the Texas Legislature adjourned on May 31st. The session began approximately nine months into the COVID-19 pandemic, and early on, much of the attention was devoted to how the state should have responded. During the early days of the session, however, Winter Storm Uri devastated Texas, leaving millions without power for several days. Natural gas prices spiked to the highest levels in recent memory and ERCOT shortpayments reached nearly $3 billion. Several retail electric providers exited the market and one electric cooperative sought bankruptcy protection. All this turmoil re-focused the Legislature on the actions and inaction of the industry and its regulators. For the first time in decades, legislators engaged in serious and substantive discussions about capacity markets and re-regulation. Legislators filed nearly 7,000 bills and passed just over 1,000. TPPA tracked 385 bills that had the potential to impact TPPA members or the electric market.
During the hearings immediately after the storm, TPPA provided initial legislative recommendations, many of which were eventually incorporated into various pieces of legislation. TPPA recommended that the Legislature:
- Establish a statewide emergency communications system,
- Direct the PUC to initiate a rulemaking to address scarcity pricing,
- Encourage enhanced collaboration between the PUC and the RRC,
- Provide additional funding to the PUC and the RRC to undertake new initiatives, and
- Expand and statutorily authorize the Texas Energy Reliability Council.
Of these items, the PUC has already initiated a rulemaking into the scarcity pricing mechanism without direct legislative instruction, the Legislature will be providing additional FTEs to the PUC, and the remainder of the recommendations involving a statewide emergency communications system, enhanced collaboration between agencies, and authorizing TERC, were incorporated into SB3, the Senate’s omnibus storm response bill.
Overall, the outcome was largely positive for public power. Bills that were negative to public power were opposed by TPPA and failed to pass or were favorably modified based on the advocacy of TPPA and its member systems. In general, the MOU business model and governance of our community owned utilities was largely unchanged.
TPPA worked diligently on assisting lawmakers with the scope and requirements of SB3. During the bill’s hearing in House State Affairs, TPPA testified about the need for funding for mandatory weatherization requirements as well as its concern about how provision requiring wind and solar generation resources to purchase dispatchable generation to balance out the intermittent nature of the resources might affect existing contracts. Afterwards, TPPA discussed some other potential edits with Chairman Paddie. TPPA’s recommendations were:
- Allow the PUC to develop priorities for critical care load identification instead of proscribing protections for specific classes of customers in statute.
- Allow the possibility of third-party contractor to perform weatherization inspections instead of mandating that ERCOT perform those inspections.
- Require the PUC to review pricing mechanisms instead of statutorily locking in certain processes.
The final version of the bill removed provisions requiring wind and solar to purchase dispatchable generation and provisions relating to the scarcity pricing mechanism, and no provisions requiring certain classes be protected from load shed were added in.
TPPA vigorously opposed a bill that targeted the MOU model (SB182), and TPPA is happy to report that the bill did not even receive a hearing. TPPA also opposed bills that targeted a specific MOU (SB566 and HB2775), and in part due to outcry from the entire MOU community, these bills did not pass.
TPPA supported a bill clarifying that MOUs may withhold from disclosure under the Texas Public Information Act certain customer-specific AMS data (including data relating to usage, services, and billing), as well as whether a particular account is delinquent, eligible for disconnection, or has been disconnected (HB872). TPPA also backed a bill ensuring that the state’s “move over or slow down law,” which protects utility workers, is taught in driver education classes (HB3319). Both these bills were passed.
TPPA will be closely working alongside the membership to monitor and engage in the rulemaking processes stemming from this legislative session. TPPA will strive to keep our membership informed as to new rules and compliance requirements, but please don’t hesitate to contact TPPA for questions on any new state legislation or rule.