Enrolled Bill Summary

House Bill 1500	House Author:  Holland et al.
Effective:  9-1-23	Senate Sponsor:  Schwertner

            House Bill 1500 amends the Utilities Code to continue the Public Utility Commission of Texas (PUC) and the Office of Public Utility Counsel under the Texas Sunset Act until September 1, 2029, which, in turn, also sets the next sunset review of ERCOT for the 2028‑2029 review cycle.

An omnibus bill aimed at improving the operation of the state's electric market, House Bill 1500 amends the Utilities Code and Water Code to further set out and revise provisions governing the PUC and ERCOT. Among other provisions, the bill:

·        requires the PUC to develop and regularly update an agency‑wide strategic communications plan;

·        establishes reliability requirements for future electric generation facilities operating in the ERCOT power region;

·        requires that the PUC require ERCOT to procure dispatchable reliability reserve services on a day‑ahead and real‑time basis to account for market uncertainty;

·        establishes guardrails for any credit‑based reliability program, including by implementing an annual $1 billion net cost cap;

·        requires the PUC to establish a reasonable allowance for costs incurred by transmission‑owning utilities to interconnect generation resources to the ERCOT transmission system and requires that costs in excess of the allowance be directly assigned to and collected from the generation resource;

·        establishes the Grid Reliability Legislative Oversight Committee to oversee the PUC's implementation of legislation related to the regulation of the electricity market in Texas enacted by the 87th and 88th Texas Legislatures;

·        requires the PUC to submit an annual report to the legislature on dispatchable and non‑dispatchable generation facilities and a biennial report on the state's electric industry;

·        repeals the state's renewable energy goal and provides for the phasing out of the renewable energy credit program while also creating a new program under which ERCOT must maintain an accreditation and banking system for awarding and tracking voluntary renewal energy credits;

·        with respect to voluntary mitigation plans (VMPs):

o   provides for the regular reviews of enacted VMPs to determine whether a VMP is in the public interest and requires any VMP not in the public interest to be modified or terminated;

o   increases the maximum penalty for a violation of a VMP to $1,000,000; and

o   removes adherence to a VMP as an absolute defense against an alleged violation with respect to activities covered by the VMP;

·        prohibits the PUC from giving verbal directives to ERCOT in non‑emergent situations and requires instead that PUC directives given to ERCOT to take an official action come via a contested case, rulemaking, or a memorandum or written order;

·        limits the circumstances under which the ERCOT board may enter into executive session and adds an additional PUC member to the ERCOT board as a nonvoting, ex officio member; and

·        clarifies that certain ERCOT protocols, rules, and enforcement are subject to PUC oversight and contingent on PUC approval and authorizes the PUC to approve, reject, or remand with suggested modifications any protocols adopted by ERCOT.