LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION


March 27, 2023

TO:	Honorable Charles Schwertner, Chair, Senate Committee on Business & Commerce

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB2112 by Johnson (Relating to resources used to ensure the continuous provision of power.), As Introduced

Estimated Two-year Net Impact to General Revenue Related Funds for SB2112, As Introduced : a negative impact of ($4,486,788) through the biennium ending August 31, 2025.

General Revenue-Related Funds, Five- Year Impact:

All Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2024	($2,803,820)
2025	($1,682,968)
2026	($1,695,389)
2027	($1,708,185)
2028	($1,721,363)

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1	Change in Number of State Employees from FY 2023
2024	($2,803,820)	10.4
2025	($1,682,968)	10.4
2026	($1,695,389)	10.4
2027	($1,708,185)	10.4
2028	($1,721,363)	10.4

The bill would create the Texas Power Resiliency Fund as a special fund in the state treasury outside the General Revenue Fund to be administered and used, without further appropriation, by the State Energy Conservation Office and the Texas Division of Emergency Management (TDEM).

The fund would consist of transferred or deposited money, revenue dedicated by general law, and investment earnings and interest. The fund and its accounts would be kept and held by the Texas Treasury Safekeeping Trust Company.

The bill would direct the office and TDEM to collaborate to provide grants and loans from the new fund, as provided by provisions of the bill, for the operation of a Texas backup power package that met certain criteria. The office would be responsible for awarding grants and loans and entering into agreements as necessary. TDEM would be required to convene an advisory committee to recommend criteria to employ in making a grant or loan.

The bill would require TDEM to contract with a research entity with experience in microgrid design to analyze critical facility characteristics and requirements in the state and develop specifications for Texas backup power packages.

The bill would require the Texas Commission on Environmental Quality (TCEQ) and the Public Utility Commission of Texas (PUC) each to adopt a process to expedite the permitting of a Texas backup power package.

The bill would require the PUC to require transmission and distribution utilities to use good faith efforts to ensure that no distribution feeder was subject to load shedding for more than four consecutive hours in a six-hour period.

The bill would take effect on the date on which the constitutional amendment providing for the creation of the Texas Power Resiliency Fund takes effect. If the joint resolution proposing that amendment (SJR 82) was not enacted, and if the amendment was not approved by the voters, the bill would have no effect.

The Comptroller indicates that the State Energy Conservation Office would require 1.0 Accountant IV and 6.0 Program Specialists V ($598,000 per fiscal year for the 7.0 FTEs) to establish and administer the program to issue loans per the provisions of the bill. Additionally, $500,000 each fiscal year would be required for professional services.

The Texas Division of Emergency Management (TDEM) estimates that, to implement the bill's provisions, it would need to hire 1.0 Associate Director of Operations ($115,261 in fiscal 2024 and $124,655 in fiscal 2025), 0.4 Program Specialist IV ($25,446 per fiscal year), and 2.0 Grant Administrators IV ($175,599 in fiscal 2024 and $193,054 in fiscal 2025). Additionally, TDEM indicates that funds would be needed for other personnel costs, professional fees and services, fuels and lubricants, consumable supplies, utilities, travel, building rent, machine and other rent, and other operating expenses, as well as technology development costs. In total, TDEM indicates that the fiscal implications of the bill would be $1,705,820 in fiscal 2024 and $584,968 in fiscal 2025 to implement the provisions of the bill.

Based on analyses from the PUC and TCEQ, the bill would have no significant fiscal impact on either agency.

TDEM estimates that there would be a cost of $100,000 for technology development to implement a new grant structure within the agency's current framework. Additionally, there would be some costs related to the additional FTEs for new phones and laptops.

Local Government Impact

The bill could have an impact on local governments, if municipally owned utilities were required to expedite permitting of Texas backup power package. However, the fiscal implications of the bill cannot be determined at this time.