By: Johnson S.B. No. 2112
(In the Senate - Filed March 9, 2023; March 21, 2023, read
first time and referred to Committee on Business & Commerce;
April 18, 2023, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 10, Nays 0; April 18, 2023,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 2112 By: Johnson
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) "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 DUTIES. (a) The division shall
convene an advisory committee in the manner provided by Chapter
2110, Government Code.
(b) The advisory committee shall recommend criteria for the
division 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 may
provide grants and loans under this subchapter.
(b) The division 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 division may provide a loan under this subchapter
for procurement and operating costs.
(e) The division 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 division 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.
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
the division.
(b) The fund and the fund's accounts are kept and held by the
trust company for and in the name of the division.
(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 credited, appropriated, or transferred to
the fund by the legislature;
(2) revenue that the legislature dedicates for deposit
to the credit of the fund;
(3) the returns received from the investment of money
in the fund; and
(4) gifts, grants, and donations contributed to the
fund.
Sec. 418.408. MANAGEMENT AND INVESTMENT OF FUND. (a) The
trust company shall hold and invest the fund, taking into account
the purposes for which money in the fund may be used. The fund may
be invested with the state treasury pool or pooled with other state
assets for purposes of investment.
(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 over a full
economic cycle.
(c) In managing the assets of the fund, 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 reasonable expenses of managing the fund shall be
paid from the fund.
(e) The trust company annually shall provide a written
report to the division with respect to the investment of the fund.
(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 division annually shall provide to the trust company
a forecast of the cash flows into and out of the fund. The division
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 division.
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 D, Chapter 38, Utilities Code, is
amended by adding Section 38.078 to read as follows:
Sec. 38.078. CIRCUIT SEGMENTATION STUDY AND COST RECOVERY.
(a) Not later than September 15, 2023, the commission shall direct
each transmission and distribution utility to perform a circuit
segmentation study.
(b) A circuit segmentation study must:
(1) use an engineering analysis to examine whether and
how the transmission and distribution utility's transmission and
distribution systems can be segmented and sectionalized to manage
and rotate outages more evenly across all customers and circuits,
while maintaining the protections offered to critical facilities;
(2) include an engineering analysis of the feasibility
of using sectionalization, automated reclosers, and other
technology to break up the circuits that host significant numbers
of critical facilities into smaller segments for outage management
purposes to enable more granular and flexible outage management;
(3) identify feeders with extensive numbers of
critical facilities that, if equipped with facility-specific
backup power systems and segmentation, can enhance the utility's
outage management flexibility; and
(4) include an estimate of the time, capital cost, and
expected improvements to load-shed management associated with the
circuit segmentation study.
(c) Each transmission and distribution utility shall submit
a report of the conclusions of the utility's study to the commission
not later than September 1, 2024.
(d) The commission shall review each circuit segmentation
study not later than March 15, 2025.
(e) If the commission determines that the implementation of
circuit segmentation engineering and investments as provided by a
transmission and distribution utility's circuit segmentation study
report would facilitate better outage management in the ERCOT power
region, investments made by the utility for such purposes shall be
presumed just, reasonable, and appropriate for rate-based cost
recovery.
SECTION 5. 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 6. 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.
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