Texas 2025 - 89th Regular

Texas Senate Bill SB388 Compare Versions

Version 1 (Old)

Version 2 (New)

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1		-	By: King, Bettencourt S.B. No. 388
2		-	Kolkhorst
	1	+	By: King, Kolkhorst S.B. No. 388
	2	+	(In the Senate - Filed November 19, 2024; February 3, 2025,
	3	+	read first time and referred to Committee on Business & Commerce;
	4	+	March 13, 2025, reported adversely, with favorable Committee
	5	+	Substitute by the following vote: Yeas 7, Nays 4; March 13, 2025,
	6	+	sent to printer.)
	7	+	Click here to see the committee vote
	8	+	COMMITTEE SUBSTITUTE FOR S.B. No. 388 By: King
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7	13		A BILL TO BE ENTITLED
8	14		AN ACT
9	15		relating to the legislature's goals for electric generation
10	16		capacity in this state.
11	17		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	18		SECTION 1. Section 39.9044, Utilities Code, is amended to
13	19		read as follows:
14	20		Sec. 39.9044. GOAL FOR DISPATCHABLE GENERATION [NATURAL
15	21		GAS]. (a) It is the intent of the legislature that 50 percent of
16	22		the megawatts of generating capacity installed in the ERCOT power
17	23		region [this state] after January 1, 2026 [2000], be sourced from
18		-	dispatchable generation ~~other than battery energy storage~~ [~~use~~
19		-	~~natural gas]. [To the extent~~ permitted by law, the commission shall
20		-	~~establish a program to~~ encourage utilities to comply with this
21		-	~~section by using natural~~ gas produced in this state as the
22		-	~~preferential fuel. This section~~ does not apply to generating
23		-	~~capacity for renewable energy~~ technologies.]
	24	+	dispatchable generation [use natural gas]. [To the extent
	25	+	permitted by law, the commission shall establish a program to
	26	+	encourage utilities to comply with this section by using natural
	27	+	gas produced in this state as the preferential fuel. This section
	28	+	does not apply to generating capacity for renewable energy
	29	+	technologies.]
24	30		(b) The commission shall establish a dispatchable
25	31		generation [natural gas energy] credits trading program. Any power
26	32		generation company, municipally owned utility, or electric
27	33		cooperative that does not satisfy the requirements of Subsection
28	34		(a) by directly owning or purchasing rights to dispatchable
29	35		generation capacity [using natural gas technologies] shall
30	36		purchase sufficient dispatchable generation [natural gas energy]
31		-	credits, from sources other than battery energy storage capacity,
32		-	to satisfy the requirements of this section [by holding natural gas
33		-	energy credits in lieu of capacity from natural gas energy
34		-	technologies]. A power generation company that exclusively
35		-	operates battery energy storage resources is not required to
36		-	purchase dispatchable generation credits under this section.
	37	+	credits to satisfy the requirements of this section [by holding
	38	+	natural gas energy credits in lieu of capacity from natural gas
	39	+	energy technologies].
37	40		(c) The [Not later than January 1, 2000, the] commission
38	41		shall adopt rules necessary to administer and enforce this section
39	42		[and to perform any necessary studies in cooperation with the
40	43		Railroad Commission of Texas]. At a minimum, the rules must
41	44		[shall]:
42	45		(1) describe how the commission will calculate
43	46		[establish] the [minimum] annual dispatchable [natural gas]
44	47		generation requirement for each power generation company,
45	48		municipally owned utility, and electric cooperative operating in
46	49		the ERCOT power region [this state] in a manner reasonably
47	50		calculated by the commission to produce[, on a statewide basis,]
48	51		compliance with the requirement prescribed by Subsection (a); and
49	52		(2) specify reasonable performance standards that all
50	53		dispatchable generation [natural gas] capacity additions must meet
51	54		to count against the requirement prescribed by Subsection (a) and
52	55		that:
53	56		(A) are designed and implemented [operated] so as
54	57		to maximize reliability [the energy output from the capacity
55	58		additions in accordance with then-current industry standards and
56	59		best industry standards]; and
57	60		(B) encourage the development, construction, and
58	61		operation of new natural gas energy projects at those sites in the
59	62		ERCOT power region [this state] that have the greatest economic
60	63		potential for capture and development of this state's
61	64		environmentally beneficial natural gas resources.
62	65		(d) On or before January 1, 2027, the commission shall
63	66		activate the dispatchable generation credits trading program
64	67		established by this section if the commission determines that
65	68		dispatchable generation may provide less than 55 percent of all new
66	69		generating capacity installed in the ERCOT power region after
67	70		January 1, 2026. Not later than the 180th day after the date of the
68	71		program's activation, the commission by rule shall determine the
69	72		conditions for compliance and penalties for noncompliance for each
70	73		power generation company, municipally owned utility, and electric
71		-	cooperative subject to the program. A power generation company
72		-	that exclusively operates battery energy storage resources is not
73		-	subject to the program. The commission may adopt rules providing
74		-	for alternative compliance payments [The commission, with the
75		-	assistance of the Railroad Commission of Texas, shall adopt rules
76		-	allowing and encouraging retail electric providers and municipally
77		-	owned utilities and electric cooperatives that have adopted
78		-	customer choice to market electricity generated using natural gas
79		-	produced in this state as environmentally beneficial. The rules
80		-	shall allow a provider, municipally owned utility, or cooperative
81		-	to:
	74	+	cooperative subject to the program. The commission may adopt rules
	75	+	providing for alternative compliance payments [The commission,
	76	+	with the assistance of the Railroad Commission of Texas, shall
	77	+	adopt rules allowing and encouraging retail electric providers and
	78	+	municipally owned utilities and electric cooperatives that have
	79	+	adopted customer choice to market electricity generated using
	80	+	natural gas produced in this state as environmentally beneficial.
	81	+	The rules shall allow a provider, municipally owned utility, or
	82	+	cooperative to:
82	83		[(1) emphasize that natural gas produced in this state
83	84		is the cleanest-burning fossil fuel; and
84	85		[(2) label the electricity generated using natural gas
85	86		produced in this state as "green" electricity].
86	87		(e) In this section, "dispatchable generation" ["natural
87	88		gas technology"] means generating technologies other than
88		-	technologies considered non-dispatchable under Section 39.159(a)
89		-	[any technology that exclusively relies on natural gas as a primary
90		-	fuel source].
	89	+	technologies considered non-dispatchable under Section 39.159(a).
	90	+	The term does not apply to a battery energy storage facility for the
	91	+	purposes of this section [any technology that exclusively relies on
	92	+	natural gas as a primary fuel source].
91	93		(f) The independent organization certified under Section
92	94		39.151 for the ERCOT power region shall establish a tracking system
93	95		to award dispatchable generation credits to new dispatchable
94	96		generation facilities that meet eligibility requirements
95	97		established by the commission. Each megawatt of installed
96	98		dispatchable generation capacity energized after January 1, 2026,
97	99		is eligible for one dispatchable generation credit.
98	100		(g) For the purposes of this subsection, a compliance
99	101		premium is an additional tradable instrument that is equal to one
100	102		dispatchable generation credit. The commission shall require the
101	103		independent organization certified under Section 39.151 for the
102	104		ERCOT power region to award to a nuclear generation facility
103	105		energized after January 1, 2026, one compliance premium in addition
104	106		to each dispatchable generation credit awarded to the facility.
105	107		(h) Not later than September 15 of each year, the
106	108		independent organization certified under Section 39.151 for the
107	109		ERCOT power region shall file with the commission a report on all
108	110		generating facilities energized in the ERCOT power region during
109	111		the prior year that includes a calculation of whether the prior
110	112		year's installed dispatchable generation capacity is in compliance
111	113		with this section.
112	114		(i) Not later than January 15 of each year, the commission
113	115		shall notify each power generation company, municipally owned
114	116		utility, and electric cooperative of the power generation
115	117		company's, municipally owned utility's, or electric cooperative's
116	118		dispatchable generation credits requirement for the prior year, if
117	119		any.
118	120		(j) Each power generation company, municipally owned
119	121		utility, or electric cooperative shall retire sufficient
120	122		dispatchable generation credits to meet the power generation
121	123		company's, municipally owned utility's, or electric cooperative's
122	124		dispatchable generation credits requirement not later than an
123	125		annual deadline established by the commission.
124	126		SECTION 2. Section 40.004, Utilities Code, is amended to
125	127		read as follows:
126	128		Sec. 40.004. JURISDICTION OF COMMISSION. Except as
127	129		specifically otherwise provided in this chapter, the commission has
128	130		jurisdiction over municipally owned utilities only for the
129	131		following purposes:
130	132		(1) to regulate wholesale transmission rates and
131	133		service, including terms of access, to the extent provided by
132	134		Subchapter A, Chapter 35;
133	135		(2) to regulate certification of retail service areas
134	136		to the extent provided by Chapter 37;
135	137		(3) to regulate rates on appeal under Subchapters D
136	138		and E, Chapter 33, subject to Section 40.051(c);
137	139		(4) to establish a code of conduct as provided by
138	140		Section 39.157(e) applicable to anticompetitive activities and to
139	141		affiliate activities limited to structurally unbundled affiliates
140	142		of municipally owned utilities, subject to Section 40.054;
141	143		(5) to establish terms and conditions for open access
142	144		to transmission and distribution facilities for municipally owned
143	145		utilities providing customer choice, as provided by Section 39.203;
144	146		(6) to administer the dispatchable generation
145	147		[natural gas energy] credits trading program under Section
146	148		39.9044(b);
147	149		(7) to require reports of municipally owned utility
148	150		operations only to the extent necessary to:
149	151		(A) enable the commission to determine the
150	152		aggregate load and energy requirements of the state and the
151	153		resources available to serve that load; or
152	154		(B) enable the commission to determine
153	155		information relating to market power as provided by Section 39.155;
154	156		and
155	157		(8) to evaluate and monitor the cybersecurity
156	158		preparedness of a municipally owned utility described by Section
157	159		39.1516(a)(3) or (4).
158	160		SECTION 3. This Act takes effect September 1, 2025.
	161	+	* * * * *