Texas 2023 - 88th Regular

Texas Senate Bill SB2012 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	88R25766 JXC-D
2	2	By: Schwertner, et al. S.B. No. 2012
3	3	(Hunter)
4	4	Substitute the following for S.B. No. 2012: No.
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the implementation of a program to meet the reliability
10	10	needs of the ERCOT power region.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Subchapter D, Chapter 39, Utilities Code, is
13	13	amended by adding Section 39.166 to read as follows:
14	14	Sec. 39.166. RELIABILITY PROGRAM. (a) The commission may
15	15	not require retail customers or load-serving entities in the ERCOT
16	16	power region to purchase credits designed to support a required
17	17	reserve margin or other capacity or reliability requirement until:
18	18	(1) the independent organization certified under
19	19	Section 39.151 for the ERCOT power region and the wholesale
20	20	electric market monitor complete an updated assessment on the cost
21	21	to and effects on the ERCOT market of the proposed reliability
22	22	program; and
23	23	(2) the independent organization certified under
24	24	Section 39.151 for the ERCOT power region begins implementing real
25	25	time co-optimization of energy and ancillary services in the ERCOT
26	26	wholesale market.
27	27	(b) The assessment required under Subsection (a) must
28	28	include:
29	29	(1) an evaluation of the cost of new entry and the
30	30	effects of the proposed reliability program on consumer costs and
31	31	the competitive retail market;
32	32	(2) a compilation of detailed information regarding
33	33	cost offsets realized through a reduction in costs in the energy and
34	34	ancillary services markets and use of reliability unit commitments;
35	35	(3) a set of metrics to measure the effects of the
36	36	proposed reliability program on system reliability;
37	37	(4) an evaluation of the cost to retain existing
38	38	dispatchable resources in the ERCOT power region;
39	39	(5) an evaluation of the planned timeline for
40	40	implementation of real time co-optimization for energy and
41	41	ancillary services in the ERCOT power region; and
42	42	(6) anticipated market and reliability effects of new
43	43	and updated ancillary service products.
44	44	(c) The commission may not implement a reliability program
45	45	described by Subsection (a) unless the commission by rule
46	46	establishes the essential features of the program, including
47	47	requirements to meet the reliability needs of the power region, and
48	48	the program:
49	49	(1) requires the independent organization certified
50	50	under Section 39.151 for the ERCOT power region to procure the
51	51	credits centrally in a manner designed to prevent market
52	52	manipulation by affiliated generation and retail companies;
53	53	(2) limits participation in the program to
54	54	dispatchable resources with the specific attributes necessary to
55	55	meet operational needs of the ERCOT power region;
56	56	(3) ensures that a generator cannot receive credits
57	57	that exceed the amount of generation bid into the forward market by
58	58	that generator;
59	59	(4) ensures that an electric generating unit can
60	60	receive a credit only for being available to perform in real time
61	61	during the tightest intervals of low supply and high demand on the
62	62	grid, as defined by the commission on a seasonal basis;
63	63	(5) establishes a penalty structure, resulting in a
64	64	net benefit to load, for generators that bid into the forward market
65	65	but do not meet the full obligation;
66	66	(6) provides the wholesale electric market monitor
67	67	with the authority and resources necessary to investigate potential
68	68	instances of market manipulation by any means, including by
69	69	financial or physical actions;
70	70	(7) ensures that the net cost imposed on the ERCOT
71	71	market for the credits does not exceed $500 million annually;
72	72	(8) ensures that any program reliability standard
73	73	reasonably balances the incremental reliability benefits to
74	74	customers against the incremental costs of the program based on an
75	75	evaluation by the wholesale electric market monitor;
76	76	(9) establishes a single ERCOT-wide clearing price for
77	77	the program and does not differentiate payments or credit values
78	78	based on locational constraints;
79	79	(10) does not assign costs, credit, or collateral for
80	80	the program in a manner that provides a cost advantage to
81	81	load-serving entities who own, or whose affiliates own, generation
82	82	facilities;
83	83	(11) requires sufficient secured collateral so that
84	84	other market participants do not bear the risk of non-performance
85	85	or non-payment;
86	86	(12) ensures that the cost of all credits paid to
87	87	dispatchable resources is allocated to loads based on an hourly
88	88	load ratio share; and
89	89	(13) removes any market changes implemented as a
90	90	bridge solution for the program not later than the first
91	91	anniversary of the date the program was implemented.
92	92	(d) The commission and the independent organization
93	93	certified under Section 39.151 for the ERCOT power region may not
94	94	adopt a market rule for the ERCOT power region associated with the
95	95	implementation of a reliability program described by Subsection (a)
96	96	that provides a cost advantage to load-serving entities who own, or
97	97	whose affiliates own, generation facilities.
98	98	(e) The wholesale electric market monitor biennially shall:
99	99	(1) evaluate the incremental reliability benefits of
100	100	the program for consumers compared to the costs to consumers of the
101	101	program and the costs in the energy and ancillary services markets;
102	102	and
103	103	(2) report the results of each evaluation to the
104	104	legislature.
105	105	SECTION 2. This Act takes effect immediately if it receives
106	106	a vote of two-thirds of all the members elected to each house, as
107	107	provided by Section 39, Article III, Texas Constitution. If this
108	108	Act does not receive the vote necessary for immediate effect, this
109	109	Act takes effect September 1, 2023.