88R15918 JXC-D
By: Schwertner, King S.B. No. 7
A BILL TO BE ENTITLED
AN ACT
relating to the reliability of the ERCOT power grid.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 39.159, Utilities Code,
as added by Chapter 426 (S.B. 3), Acts of the 87th Legislature,
Regular Session, 2021, is amended to read as follows:
Sec. 39.159. POWER REGION RELIABILITY AND DISPATCHABLE
GENERATION.
SECTION 2. Section 39.159, Utilities Code, as added by
Chapter 426 (S.B. 3), Acts of the 87th Legislature, Regular
Session, 2021, is amended by amending Subsection (b) and adding
Subsections (b-1) and (d) to read as follows:
(b) The commission shall ensure that the independent
organization certified under Section 39.151 for the ERCOT power
region:
(1) establishes requirements to meet the reliability
needs of the power region;
(2) periodically, but at least annually, determines
the quantity and characteristics of ancillary or reliability
services necessary to ensure appropriate reliability during
extreme heat and extreme cold weather conditions and during times
of low non-dispatchable power production in the power region;
(3) procures ancillary or reliability services on a
competitive basis to ensure appropriate reliability during extreme
heat and extreme cold weather conditions and during times of low
non-dispatchable power production in the power region;
(4) develops appropriate qualification and
performance requirements for providing services under Subdivision
(3), including appropriate penalties for failure to provide the
services; [and]
(5) sizes the services procured under Subdivision (3)
to prevent prolonged rotating outages due to net load variability
in high demand and low supply scenarios; and
(6) allocates the cost of providing ancillary services
and reliability services procured under this section on an annual
basis among dispatchable generation facilities, non-dispatchable
generation facilities, and load serving entities in proportion to
their contribution to net load variability over the highest 100
hours of net load in the preceding year as follows:
(A) for dispatchable generation facilities, the
difference between the mean of the highest quartile forced outage
rate for the facility and the mean forced outage rate of all
dispatchable generation facilities in the ERCOT power region;
(B) for non-dispatchable generation facilities,
the difference between the mean of the lowest quartile generation
for each non-dispatchable generation facility, divided by the
installed capacity of that facility, and the mean generation of all
non-dispatchable generation facilities in the ERCOT power region,
divided by the total installed capacity of all non-dispatchable
generation facilities in the ERCOT power region; and
(C) for load serving entities, the difference
between the mean of the highest quartile of each entity's metered
load and the mean of each entity's metered load.
(b-1) Subsection (b)(6) applies only to a generation
facility or load serving entity that has participated in the ERCOT
market for at least one year.
(d) The commission shall require the independent
organization certified under Section 39.151 for the ERCOT power
region to develop an ancillary services program that requires load
serving entities to purchase dispatchable reliability reserve
services on a day-ahead basis to account for market uncertainty.
The program must provide payments only to generation resources that
are not providing other ancillary services. The commission must
require the independent organization to:
(1) determine the quantity of services necessary based
on historical variations in generation availability for each season
based on a targeted reliability standard or goal, including
renewable intermittency and forced outage rates; and
(2) develop criteria for resource participation that
require a resource to:
(A) have a runtime of at least four hours;
(B) be available not less than two hours after
being called on for deployment; and
(C) have the dispatchable flexibility to address
inter-hour operational challenges.
SECTION 3. Subchapter D, Chapter 39, Utilities Code, is
amended by adding Section 39.1591 to read as follows:
Sec. 39.1591. REPORT ON DISPATCHABLE AND NON-DISPATCHABLE
GENERATION FACILITIES. The commission shall file an annual report
with the legislature that:
(1) includes:
(A) the estimated annual costs required to be
incurred under this subchapter by non-dispatchable generators to
guarantee that a firm amount of electric energy will be provided for
the ERCOT power grid; and
(B) the cumulative annual transmission costs
that have been incurred in the ERCOT market to facilitate the
transmission of non-dispatchable electricity to load;
(2) documents the status of the implementation of this
subchapter, including whether the rules and protocols adopted to
implement this subchapter have materially improved the
reliability, resilience, and transparency of the electricity
market; and
(3) includes recommendations for any additional
legislative measures needed to empower the commission to implement
market reforms to ensure that market signals are adequate to
preserve existing dispatchable generation and incentivize the
construction of new dispatchable generation sufficient to maintain
reliability standards for at least five years after the date of the
report.
SECTION 4. (a) Not later than September 1, 2024, the
Public Utility Commission of Texas shall implement the changes in
law made by this Act to Section 39.159(b), Utilities Code, as added
by Chapter 426 (S.B. 3), Acts of the 87th Legislature, Regular
Session, 2021.
(b) Not later than December 1, 2024, the Public Utility
Commission of Texas shall implement the changes in law made by this
Act in Section 39.159(d), Utilities Code, as added by this Act.
(c) The Public Utility Commission of Texas shall prepare the
portion of the first report required by Section 39.1591(1),
Utilities Code, as added by this Act, not later than December 1,
2023.
(d) The Public Utility Commission of Texas shall prepare the
portions of the first report required by Sections 39.1591(2) and
(3), Utilities Code, as added by this Act, not later than December
1, 2024.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2023.