By: Johnson S.B. No. 2112
A BILL TO BE ENTITLED
AN ACT
relating to resources used to ensure the continuous provision of
power.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter C, Chapter 382, Health and Safety
Code, is amended by adding Section 382.069 to read as follows:
Sec. 382.069. TEXAS BACKUP POWER PACKAGE. (a) In this
section, "Texas backup power package" has the meaning assigned by
Section 418.401, Government Code.
(b) The commission by rule shall adopt a process to expedite
the permitting of a Texas backup power package for which a permit is
required under this chapter.
SECTION 2. Chapter 418, Government Code, is amended by
adding Subchapter K to read as follows:
SUBCHAPTER K. TEXAS POWER PROMISE
Sec. 418.401. DEFINITIONS. In this subchapter:
(1) "Fund" means the Texas power resiliency fund
established by Section 49-q, Article III, Texas Constitution.
(2) "Texas backup power package" means a stand-alone,
behind-the-meter, multiday backup power source that can be used for
islanding.
(3) "Office" means the State Energy Conservation
Office.
(4) "Trust company" means the Texas Treasury
Safekeeping Trust Company.
Sec. 418.402. PURPOSE. The purpose of this subchapter is to
facilitate and provide funding for:
(1) the design, procurement, installation, and use of
Texas backup power packages for facilities on which communities
rely for health, safety, and well-being; and
(2) the procurement and use of mobile sources of
backup power to ensure the health, safety, and well-being of
communities.
Sec. 418.403. DIVISION AUTHORITY. (a) The division shall
convene an advisory committee in the manner provided by Chapter
2110, Government Code. The advisory committee must include a
person to represent the office.
(b) The advisory committee shall recommend criteria for the
division and the office to employ in making a grant or loan under
this subchapter.
(c) The division shall contract with a research entity that
has experience in microgrid design to analyze critical facility
characteristics and requirements in this state and develop for
Texas backup power packages:
(1) sets of specifications for standard backup power
packages of various sizes that can serve most critical facilities
in this state; and
(2) specifications for standard interconnection,
communications, and controls for Texas backup power packages.
Sec. 418.404. TEXAS BACKUP POWER PACKAGES. (a) A grant or
loan made under this subchapter may be provided only for the
operation of a Texas backup power package that:
(1) is engineered to minimize operation costs;
(2) uses interconnection technology and controls that
enable immediate islanding from the power grid and stand-alone
operation for the host facility;
(3) is capable of operating for at least 48 continuous
hours without refueling or connecting to a separate power source;
(4) is designed so that one or more Texas backup power
packages can be aggregated on-site to serve not more than 2.5
megawatts of load at the host facility;
(5) provides power sourced from:
(A) a combination of natural gas or propane with
photovoltaic panels and battery storage; or
(B) battery storage on an electric school bus;
and
(6) is not used by the owner or host facility for the
sale of energy or ancillary services.
(b) Texas backup power packages may be aggregated and
operated to support the power grid under emergency conditions if
the operation does not compromise a Texas backup power package's
capability to provide power to its host facility for at least 24
hours of operation without refueling or connecting to a separate
power source.
Sec. 418.405. GRANTS AND LOANS. (a) The division and the
office shall collaborate to provide grants and loans under this
subchapter.
(b) The office is responsible for awarding grants and loans
and entering into agreements under this subchapter. The office by
rule may establish procedures for:
(1) the application for and award of a grant or loan
under this subchapter; and
(2) the administration of the fund.
(c) The amount of a grant provided under this subchapter may
not exceed $500 per kilowatt of capacity.
(d) The office may provide a loan under this subchapter for
procurement and operating costs.
(e) The office shall maintain and publish a list of approved
vendors eligible to assist with the sale, installation, operation,
and ongoing maintenance of Texas backup power packages.
(f) The office may not provide a grant or loan under this
subchapter for:
(1) a commercial energy system, a private school, or a
for-profit entity that does not directly serve public safety and
human health; or
(2) a source of backup power that does not follow the
design and use standards of a Texas backup power package.
(g) A grant or loan awarded by this office under this
subchapter is not subject to a restriction on repayment imposed by
Chapter 447 or 2305 on other grants or loans awarded by the office.
Sec. 418.406. MOBILE BACKUP POWER FLEET. The division may
use money from the fund to procure and deploy mobile sources of
backup power to ensure the health, safety, and well-being of
communities.
Sec. 418.407. FUND. (a) The Texas power resiliency fund is
a special fund in the state treasury outside the general revenue
fund to be administered and used, without further appropriation,
by:
(1) the office for the purposes described by Section
418.405; and
(2) the division for the purposes described by Section
418.406.
(b) The fund and the fund's accounts are kept and held by the
trust company for and in the name of the office. The office has
legal title to money and investments in the fund until money is
disbursed from the fund as provided by this subchapter and office
rules.
(c) Money deposited to the credit of the fund may be used
only as provided by this subchapter.
(d) The fund consists of:
(1) money transferred or deposited to the credit of
the fund by or as authorized by law, including money from any source
transferred or deposited to the credit of the fund at the office's
discretion;
(2) revenue, including the proceeds of any fee,
assessment, or tax imposed by this state, that general law
dedicates for deposit to the credit of the fund; and
(3) investment earnings and interest earned on money
in the fund.
Sec. 418.408. MANAGEMENT AND INVESTMENT OF FUND. (a) The
trust company shall hold and invest the fund, and any accounts
established in the fund, for and in the name of the office, taking
into account the purposes for which money in the fund may be used.
The fund may be invested with the state treasury pool.
(b) The overall objective for the investment of the fund is
to maintain sufficient liquidity to meet the needs of the fund while
striving to preserve the purchasing power of the fund.
(c) The trust company has any power necessary to accomplish
the purposes of managing and investing the assets of the fund. In
managing the assets of the fund, through procedures and subject to
restrictions the trust company considers appropriate, the trust
company may acquire, exchange, sell, supervise, manage, or retain
any kind of investment that a prudent investor, exercising
reasonable care, skill, and caution, would acquire or retain in
light of the purposes, terms, distribution requirements, and other
circumstances of the fund then prevailing, taking into
consideration the investment of all the assets of the fund rather
than a single investment.
(d) The trust company may charge fees to cover its costs
incurred in managing and investing the fund. The fees must be
consistent with the fees the trust company charges other state and
local governmental entities for which it provides investment
management services. The trust company may recover fees it charges
under this subsection only from the earnings of the fund.
(e) The trust company annually shall provide a written
report to the office with respect to the investment of the fund.
The trust company shall contract with a certified public accountant
to conduct an independent audit of the fund annually and shall
present the results of each annual audit to the office. This
subsection does not affect the state auditor's authority to conduct
an audit of the fund under Chapter 321.
(f) The trust company shall adopt a written investment
policy that is appropriate for the fund. The trust company shall
present the investment policy to the investment advisory board
established under Section 404.028. The investment advisory board
shall submit to the trust company recommendations regarding the
policy.
(g) The office annually shall provide to the trust company a
forecast of the cash flows into and out of the fund. The office
shall provide updates to the forecasts as appropriate to ensure
that the trust company is able to achieve the objective specified by
Subsection (b).
(h) The trust company shall disburse money from the fund as
directed by the office.
(i) An investment-related contract entered into under this
section is not subject to Chapter 2260.
SECTION 3. Section 38.076, Utilities Code, is amended by
adding Subsection (c-1) to read as follows:
(c-1) The commission shall require transmission and
distribution utilities to use good faith efforts to ensure that no
distribution feeder is subject to load shedding for more than four
consecutive hours in a six-hour period.
SECTION 4. Subchapter Z, Chapter 39, Utilities Code, is
amended by adding Section 39.919 to read as follows:
Sec. 39.919. TEXAS BACKUP POWER PACKAGES. (a) In this
section, "Texas backup power package" has the meaning assigned by
Section 418.401, Government Code.
(b) The commission by rule shall adopt procedures to
expedite electric cooperative, municipally owned utility, and
electric utility interconnection requests for Texas backup power
packages.
SECTION 5. This Act takes effect on the date on which the
constitutional amendment proposed by the 88th Legislature, Regular
Session, 2023, providing for the creation of the Texas power
resiliency fund to finance backup power sources takes effect. If
that amendment is not approved by the voters, this Act has no
effect.