| 1 | 1 | | 89R4479 CXP-F |
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| 2 | 2 | | By: Sparks S.B. No. 714 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to electricity pricing rules and operating procedures that |
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| 10 | 10 | | eliminate or compensate for market distortion caused by certain |
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| 11 | 11 | | federal tax credits. |
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| 12 | 12 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 13 | 13 | | SECTION 1. Subchapter D, Chapter 39, Utilities Code, is |
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| 14 | 14 | | amended by adding Section 39.171 to read as follows: |
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| 15 | 15 | | Sec. 39.171. MARKET DISTORTION RESPONSE. (a) |
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| 16 | 16 | | Notwithstanding any other provision of this chapter, the commission |
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| 17 | 17 | | and the ERCOT independent system operator shall adopt rules, |
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| 18 | 18 | | operating procedures, and protocols to eliminate or compensate for |
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| 19 | 19 | | any distortion in electricity pricing in the ERCOT power region |
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| 20 | 20 | | caused by a federal tax credit provided under 26 U.S.C. Section 45. |
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| 21 | 21 | | (b) Rules, operating procedures, and protocols adopted |
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| 22 | 22 | | under this section must ensure that costs imposed on the system by |
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| 23 | 23 | | the sale of electricity that is eligible for a federal tax credit |
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| 24 | 24 | | provided under 26 U.S.C. Section 45, including costs of maintaining |
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| 25 | 25 | | sufficient capacity to serve load at the summer peak demand caused |
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| 26 | 26 | | by the loss of new investment from below-market prices, are paid by |
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| 27 | 27 | | the parties that impose the costs. |
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| 28 | 28 | | (c) In conjunction with adopting rules, operating |
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| 29 | 29 | | procedures, and protocols under this section, the commission and |
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| 30 | 30 | | the ERCOT independent system operator shall eliminate any rules, |
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| 31 | 31 | | operating procedures, or protocols that attempt to adjust |
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| 32 | 32 | | electricity prices to reflect the value of reserves at different |
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| 33 | 33 | | reserve levels based on the probability of reserves falling below |
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| 34 | 34 | | the minimum contingency level and the value of lost load. |
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| 35 | 35 | | SECTION 2. This Act takes effect September 1, 2025. |
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