Texas 2023 - 88th Regular

Texas House Bill HB5190 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Harris of Williamson H.B. No. 5190
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	Designating the Electric Reliability Council of Texas (ERCOT) as
7	7	the entity responsible for the reliable supply of electricity in
8	8	its interconnected area of responsibility, establishing a fund
9	9	under ERCOT's control to fund a net 5,000 MWe of "dispatchable"
10	10	"peaking unit" generating capacity owned by "Independent Power
11	11	Producers", establishing the payment structure to such
12	12	"Independent Power Producers" to fund the 5,000 MWe of
13	13	"dispatchable" "peaking unit" generating capacity, establishing
14	14	the criteria of operation and performance of the "peaking unit"
15	15	generating capacity under ERCOT's direct control, and establishing
16	16	criteria for review of ERCOT's performance in its duty to assure
17	17	reliability of electricity supply.
18	18	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
19	19	PUBLIC UTILITY REGULATORY ACT
20	20	TITLE 2 - TEXAS UTILITIES CODE
21	21	CHAPTER 35. ENERGY PROVIDERS
22	22	SUBCHAPTER A. COMPETITION AND TRANSMISSION ACCESS IN THE WHOLESALE
23	23	MARKET
24	24	(new subsection)
25	25	SEC.35.0022. RELIABILITY OF ELECTRICITY SUPPLY FROM
26	26	GENERATORS
27	27	a) Definitions:
28	28	(1) Baseload Unit - A generating unit which operates
29	29	continuously for lengthy periods of time such as a month operating
30	30	at or near its maximum output throughout each day and night.
31	31	Baseload Units are considered Dispatchable Units. Baseload Units
32	32	often require lengthy startup periods. Baseload Units are generally
33	33	coal-fired, nuclear, or geothermal steam-cycle plants.
34	34	(2) Dispatchable Units - Units which can be commanded
35	35	to run at a specified time.
36	36	(3) Duel Fuel - Generating units which can run equally
37	37	of two different type fuels such as natural gas or fuel oil.
38	38	(4) ERCOT - Electric Reliability Council of Texas
39	39	(5) Independent Power Producers - An entity that is
40	40	not required to supply electricity to a specific set of customers.
41	41	The entity generally supplies electricity to the ERCOT grid for
42	42	whomever offers the best price for the electricity.
43	43	(6) Intermediate Duty Unit - A generating unit which
44	44	operates daily to meet increased loads or to replace output from
45	45	Baseload Units which are out for maintenance. Intermediate Duty
46	46	Units are considered Dispatchable Units. Intermediate Duty Units
47	47	are generally natural-gas fired combined-cycle units, oil fired
48	48	units, hydro powered units, and waste-fired units.
49	49	(7) Non-Dispatchable Units - A unit that can not be
50	50	commanded to run at a specied time. Non-Dispatchable Units are sun
51	51	powered and wind powered generating units.
52	52	(8) Peaking Unit - A generating unit which operates
53	53	less than 15% of the year and is held in reserve to satisfy
54	54	electricity demand during periods of extreme weather, during
55	55	periods of high demand, during maintenance outages of normal
56	56	generating units, during losses of critical transmission
57	57	facilities, during sudden loses of generating units, during
58	58	periods of low wind, during periods of lack of sunshine, and
59	59	duringother unforeseen circumstances. A peaking up must be able to
60	60	produce its full output of electricity within 10 minutes of
61	61	receiving the call for operation. Peaking Units are considered
62	62	dispatchable units.
63	63	b) ERCOT shall have the principal responsibility for
64	64	assuring reliability of electricity supply.
65	65	(1) ERCOT shall control the operational dispatch of up
66	66	to 5,000 MWe of Peaking Unit capacity operated by Independent Power
67	67	Producers to assure reliable, cost effective supply of electricity
68	68	during high demand and emergency periods of time.
69	69	(2) The 5,000 MWe of Peaking Unit capacity shall be
70	70	dispatched to cover electricity generating shortages during
71	71	weather emergencies, high demand periods, loss of electrical
72	72	generation caused by the lack of wind and sun, and sudden loss of
73	73	generating units.
74	74	c) ERCOT shall establish an "Electricity Supply Reliability
75	75	Fund".
76	76	(1) The "Electricity Supply Reliability Fund" will
77	77	commence operation on September 1, 2024.
78	78	(2) ERCOT shall add and collect a $2.00 per MWH
79	79	surcharge to the output charge for all generating sources in the
80	80	ERCOT area of control as measured at the transmission or
81	81	distribution grid level starting September 1, 2024.
82	82	(3) Such generating sources shall include Independent
83	83	Power Producers, generating units of Municipal Utilities,
84	84	generating units of Electric Cooperatives, affiliated wholesale
85	85	supplier generating units, distributed natural gas generating
86	86	facilities, or any other type generating source on the ERCOT
87	87	controlled transmission and distribution grid.
88	88	(4) ERCOT shall add and collect an additional $2.00
89	89	per MWH surcharge to the output charge for all non-dispatchable
90	90	units such as wind and solar powered generating units in the ERCOT
91	91	area of control as measured at the transmission or distribution
92	92	grid level starting September 1, 2024.
93	93	(5) ERCOT will report monthly the accumulation of
94	94	funds and the sources of the revenue to the Texas Public Utilities
95	95	Commission.
96	96	d) ERCOT shall contract for up to 5,000 MWe of new Peaking
97	97	Unit generating capacity from Independent Power Producers.
98	98	(1) ERCOT shall use the accumulated income from the
99	99	"Electricity Supply Reliability Fund" to fund the contracting for
100	100	new Peaking Unit capacity.
101	101	(2) Starting September 1, 2023, ERCOT shall start
102	102	offering a capacity payment of $10.00 per KWe per month ($10,000
103	103	per MWe) of net capacity at the transmission or distribution level
104	104	for a ten year contracted period of supply of new Peaking Unit
105	105	capacity.
106	106	(3) The contracted Independent Power Producer shall
107	107	retain the Energy Pricing for its new Peaking Unit MWH output at a
108	108	minimum $150 per MWH.
109	109	(4) ERCOT shall guarantee a minimum of $60,000 per net
110	110	MWe for energy pricing per year because the Peaking Units may only
111	111	be called to run sporatically during a low-event year.
112	112	(5) Capacity payments will start at the end of the
113	113	month in which output from the generation unit(s) meets ERCOT's
114	114	operational commands.
115	115	(6) ERCOT shall be responsible for meeting the costs
116	116	of transmission or distribution utilities' requirements at the
117	117	electrical substation at which the generating units supply their
118	118	electrical output to the ERCOT grid.
119	119	(7) ERCOT shall assist the Independent Power Producer
120	120	in obtaining firm commitments for fuel to the new Peaking Unit(s).
121	121	(8) The contracted Independent Power Producer's new
122	122	Peaking Unit(s) shall be operated at the sole direction of ERCOT.
123	123	e) Operational conditions required by ERCOT for the
124	124	Independent Pwer Producer to receive monthly capacity payments for
125	125	the contacted new Peaking Unit(s).
126	126	(1) Each Peaking Unit shall respond to ERCOT calls for
127	127	operation and reach 100% output within 10 minutes.
128	128	(2) Each Peaking Unit shall not be called to operate
129	129	more than 1,000 hours per year except in declared cases of
130	130	emergency.
131	131	(3) Each Peaking Unit shall be capable of responding
132	132	daily to multiple calls to operate.
133	133	(4) ERCOT shall attempt to balance calls across its
134	134	dedicated fleet of generating capacity related to total hours of
135	135	operation and total amounts of energy charges received by the
136	136	Independent Power Producer per installed MWe per year.
137	137	(5) Each Peaking Unit shall be allow a two month
138	138	maintenance period every three years which can occurring during
139	139	the months of March, April, May, October, and November without
140	140	receiving an elimination of Capacity Payment for the period of
141	141	outage.
142	142	(6) Each Peaking Unit which is called to operate by
143	143	ERCOT but does not operate shall be penalized after two failures in
144	144	a year. The penalty shall depend upon the critical electricity
145	145	supply situation at the time of failure to run and can result in
146	146	loss of a monthly capacity payment for such Peaking Unit.
147	147	(7) Each Peaking Unit shall operate on two different
148	148	type fuels such as natural gas and fuel oil with the backup supply
149	149	being sufficient for 48 hours of operation at full output or shall
150	150	have a guaranteed fuel supply for 96 hours of operation at full
151	151	output after an emergency declaration by ERCOT.
152	152	(8) An Independent Power Producer which operates one
153	153	or multiple Peaking Units under ERCOT control may notify ERCOT of a
154	154	temporary outage of a unit for ERCOT to remove the unit from the
155	155	call rotation.
156	156	f) The Texas Public Utilities Commission shall review
157	157	ERCOT's performance on establishing Peaking Unit capacity to
158	158	increase the reliability of electricity supply. Areas of quarterly
159	159	review which shall include reporting to the Texas Legislature and
160	160	Governor are:
161	161	(1) ERCOT's "Electricity Supply Reliability Fund"
162	162	income and expenditures,
163	163	(2) The amount of ERCOT's new Peaking Unit capacity
164	164	under contract, the Independent Power Producer ownership, and the
165	165	status of the capacity,
166	166	(3) The operation use of ERCOT's new Peaking Unit
167	167	capacity.
168	168	(4) The operational effect of ERCOT's new Peaking Unit
169	169	capacity on energy costs.