Texas 2023 - 88th Regular

Texas House Bill HB4669 Compare Versions

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Version 2 (New)

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1	1	By: Harrison H.B. No. 4669
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to allocating the cost of ancillary and reliability
7	7	services procured in the ERCOT power region.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. The legislature finds that:
10	10	(1) the welfare of the residents and the economic
11	11	security of the state depend on the reliability and resilience of
12	12	the electric power supply;
13	13	(2) the increased deployment of non-dispatchable wind
14	14	and solar electricity generation has exposed the bulk power system
15	15	to significant weather dependence and will continue to erode the
16	16	reliability and resilience of the grid unless reforms are
17	17	instituted to more adequately value reliability and resilience;
18	18	(3) the current system of grid operation and
19	19	regulatory oversight has failed to ensure the reliability and
20	20	resilience of the grid for a number of reasons, including:
21	21	(A) market rules developed by the Electric
22	22	Reliability Council of Texas and overseen by the Public Utility
23	23	Commission of Texas have so far failed to adequately value
24	24	reliability and resilience of the grid; and
25	25	(B) direct and indirect subsidies for wind and
26	26	solar electricity generation have led to overinvestment in those
27	27	forms of electricity generation and undervaluation of
28	28	dispatchable, reliable, and resilient power plants, which has
29	29	resulted in the retirement of several such plants, inhibited the
30	30	addition of such plants, and inhibited weatherization expenditures
31	31	to increase the reliability and resilience of the grid;
32	32	(5) several recent federal policy announcements
33	33	mandating and incentivizing further deployment of significant
34	34	non-dispatchable electricity sources such as wind and solar without
35	35	providing sufficient resilient backup power will impose
36	36	reliability and resilience penalties on the bulk power system
37	37	relied on by the residents and industries of the state; and
38	38	(6) it is essential that the legislature immediately
39	39	provide further direction to the Public Utility Commission of Texas
40	40	regrading reliability standards for the ERCOT market and new
41	41	mechanisms to address the reliability and resilience shortcomings
42	42	of the grid.
43	43	SECTION 2. Chapter 39, Utilities Code, is amended by adding
44	44	Subchapter M to read as follows:
45	45	SUBCHAPTER M. RELIABILITY STANDARD FOR NON-DISPATCHABLE
46	46	GENERATORS
47	47	Sec. 39.601. DEFINITIONS. In this subchapter:
48	48	(1) "Dispatchable generator" means a source of
49	49	electricity that:
50	50	(A) is available for use on demand;
51	51	(B) may be dispatched on the request of a power
52	52	grid operator;
53	53	(C) may have its power output adjusted, according
54	54	to market need; and
55	55	(D) does not derive its power output primarily
56	56	from sources that inherently change from minute to minute, such as
57	57	those dependent on local weather conditions to be present.
58	58	(2) "Expected availability factor" means the average
59	59	generation of a non-dispatchable generator, divided by its
60	60	installed capacity, during the highest 100 net load hours each year
61	61	in an average of two or more immediately preceding calendar years,
62	62	as determined by the commission.
63	63	(3) "Firming requirement" is a requirement for a
64	64	non-dispatchable generator to ensure that its hourly availability
65	65	factor during at least 95 hours of the highest 100 net load hours
66	66	equals or exceeds its expected availability factor by continuing to
67	67	operate, constructing, or acquiring through a power purchase
68	68	agreement or other means sufficient resources that are eligible to
69	69	act as ancillary service reserves according to ERCOT protocols.
70	70	(4) "Hourly availability factor" means the hourly
71	71	average generation of a non-dispatchable generator, divided by its
72	72	installed capacity.
73	73	(5) "Non-dispatchable generator" means a source of
74	74	electricity that does not meet the definition of a dispatchable
75	75	generator in Paragraph (1).
76	76	Sec. 39.602. FIRMING REQUIREMENT FOR NON-DISPATCHABLE
77	77	GENERATORS.
78	78	(a) Each non-dispatchable generator in the market shall, on
79	79	an annual basis, acquire the necessary resources to meet its
80	80	firming requirement.
81	81	(b) Beginning on December 1, 2024 and not later than
82	82	December 1 of every year thereafter, each non-dispatchable
83	83	generator in the market shall demonstrate to the commission, in a
84	84	manner provided by the commission, that the non-dispatchable
85	85	generator has secured sufficient firming capacity for the upcoming
86	86	calendar year.
87	87	(c) The commission shall adopt any rules necessary to
88	88	implement this section, including rules that establish an ancillary
89	89	service market or a separate reliability service to implement this
90	90	section.
91	91	SECTION 3. Chapter 39, Utilities Code, is amended by adding
92	92	Subchapter M to read as follows:
93	93	Sec. 39.603. TRANSPARENCY REQUIRED FOR THE COST OF FIRMING
94	94	AND TRANSMISSION ASSOCIATED WITH NON-DISPATCHABLE GENERATORS.
95	95	(a) The commission shall prepare a report by December 1,
96	96	2023 and thereafter on an annual basis, that includes the estimated
97	97	annual firming costs required to be incurred under this subchapter
98	98	by non-dispatchable generators, as well as the cumulative annual
99	99	transmission costs that have been incurred in order to facilitate
100	100	the transmission of non-dispatchable electricity to load.
101	101	(b) No later than December 1, 2024, and annually
102	102	thereafter, the Public Utility Commission shall prepare a report
103	103	to the Legislature that documents the status of implementation of
104	104	this subchapter, whether the rules and protocols put in place to
105	105	implement this Act have materially improved the reliability,
106	106	resilience, and transparency of the electricity market, and whether
107	107	any additional measures need to be taken by the legislature to
108	108	empower the Commission to implement additional market reforms to
109	109	ensure that market signals are adequate to preserve existing
110	110	dispatchable generation and incent the construction of new
111	111	dispatchable generation sufficient to maintain the reliability
112	112	standard for at least 5 years from the date of the report.
113	113	SECTION 4. This Act takes effect immediately if it receives
114	114	a vote of two-thirds of all the members elected to each house, as
115	115	provided by Section 39, Article III, Texas Constitution. If this
116	116	Act does not receive the vote necessary for immediate effect, this
117	117	Act takes effect September 1, 2023.