87R11102 JXC-F
By: Reynolds H.B. No. 2687
A BILL TO BE ENTITLED
AN ACT
relating to the prevention of power blackouts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter D, Chapter 39, Utilities Code, is
amended by adding Section 39.159 to read as follows:
Sec. 39.159. ASSURING RELIABILITY IN THE ERCOT POWER
REGION. (a) The commission by rule shall require a power
generation company operating in the ERCOT power region to:
(1) weatherize the company's generation facilities and
associated equipment on an annual basis so that the facilities and
equipment are able to operate in extreme cold and heat; and
(2) submit annual weatherization plans to the
commission and the independent organization certified under
Section 39.151 for the ERCOT power region.
(b) The rules adopted under Subsection (a) must require
weatherization sufficient to withstand the extreme weather events
in Texas in February 2011, August 2011, and February 2021.
(c) The commission shall consider standards recommended by
federal agencies for weatherization when adopting rules under
Subsection (a).
(d) The commission may:
(1) inspect the generation facilities and associated
equipment of a power generation company for compliance with the
rules adopted under Subsection (a); and
(2) require a power generation company to take an
action included in the company's annual weatherization plan.
(e) If the commission or independent organization certified
under Section 39.151 for the ERCOT power region determines that
changes in the amounts of existing ancillary service obligations
required by load serving entities are needed:
(1) the commission by rule may address the imbalance;
and
(2) the independent organization may make changes to
its ancillary service obligations through a stakeholder process to
address the imbalance.
(f) The commission by rule shall establish a process for
obtaining emergency response services in addition to ancillary
services as appropriate to prevent rolling blackout conditions
caused by shortages of supply in the ERCOT power region. The rules
must include:
(1) parameters for estimating the amount of emergency
response service capacity necessary to prevent blackout
conditions; and
(2) mechanisms for equitably sharing the costs of:
(A) contracting for reserve capacity to be
available; and
(B) power provided to prevent blackout
conditions.
(g) The commission shall ensure that the total cost for
ensuring the emergency response services does not exceed $100
million annually.
(h) In accordance with rules adopted under Subsection (f),
the independent organization certified under Section 39.151 for the
ERCOT power region shall contract with qualified loads, electric
storage companies, and power generation companies, including
aggregation of loads and generators, for a defined amount of
emergency response service capacity the organization may call on to
ensure that power shortages or demand spikes do not create a need
for rolling blackouts.
(i) Before the independent organization certified under
Section 39.151 for the ERCOT power region calls on the emergency
response service capacity to prevent rolling blackouts, the
organization shall use all market sources of power, including
electric energy storage and demand reduction, in accordance with
commission rules adopted under this section.
SECTION 2. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.9053 to read as follows:
Sec. 39.9053. DEMAND RESPONSE IN ERCOT POWER REGION. (a)
In this section:
(1) "Demand response" means changes in electric usage
by customers from their normal consumption patterns in response to:
(A) changes in the price of electricity use over
time; or
(B) incentive payments designed to induce lower
electricity use at times of high wholesale market prices or when the
system reliability is jeopardized.
(2) "Demand response provider" means a competitive
energy services provider that aggregates customer load reduction
capabilities, including reliability demand response capability,
and offers those capabilities into an electricity market or
program.
(3) "Reliability demand response" means demand
response to be dispatched by an independent system operator or a
distribution utility in response to an electric grid reliability
issue.
(b) The legislature finds that electricity markets function
most efficiently when supply side and demand side resources both
contribute to the adequacy of the electric system. The legislature
also finds that the ERCOT power region has not yet achieved its
potential for demand response, and, therefore, it is the policy of
this state to promote the development of demand response to its
maximum potential and to eliminate unnecessary barriers to demand
response participation in the ERCOT power region.
(c) The commission by rule shall:
(1) require the independent organization certified
under Section 39.151 for the ERCOT power region to provide the
commission not less frequently than December 1 of each odd-numbered
year with an analysis of the potential demand response opportunity
and penetration in the ERCOT power region;
(2) promote development of demand response
participation by customers in all customer classes;
(3) remove barriers to demand response participation
for demand response providers and for customers in all customer
classes;
(4) ensure that customers in all customer classes have
the option to contract for participation in demand response either
directly with one or more demand response providers, including
retail electric providers, with scheduling entities qualified by
the independent system operator, or with a combination of entities
consisting of the independent system operator and one or more
demand response providers;
(5) establish and encourage markets, products,
programs, or services for reliability demand response and other
forms of demand response in wholesale and retail markets; and
(6) provide opportunities for demand response
providers and customers to participate in wholesale energy markets
and ancillary services markets on a comparable basis with other
resources, while accommodating differences in operational
capabilities of various customer loads among customer classes,
including differences related to availability, dispatch
notification timelines, curtailment response times, ramp rates,
curtailment duration, and times required to return to service
following an outage.
SECTION 3. The Public Utility Commission of Texas shall
adopt rules as necessary to implement Section 39.9053, Utilities
Code, as added by this Act, not later than May 1, 2022.
SECTION 4. (a) The Public Utility Commission of Texas shall
work with the independent organization certified under Section
39.151, Utilities Code, for the ERCOT power region to:
(1) assess the structure and amounts of existing
ancillary service obligations required by load serving entities;
and
(2) consider changes that may be required to improve
reliability of the electric grid system, including reducing the
need for rolling blackouts in extreme weather.
(b) In conducting the analysis under Subsection (a) of this
section, the commission and independent organization must seek
stakeholder input and consider all generation resources, including
distributed generation, electric storage, demand response, energy
efficiency, and power generation.
SECTION 5. 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 September 1, 2021.