Honorable Joan Huffman, Chair, Senate Committee on Jurisprudence
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB3 by Schwertner (Relating to preparing for, preventing, and responding to weather emergencies, power outages, and other disasters; increasing the amount of administrative and civil penalties.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for SB3, As Introduced : a negative impact of ($3,402,136) through the biennium ending August 31, 2023.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
The bill relates to preparing for, preventing, and responding to weather emergencies, power outages, and other disasters. The bill would also increase administrative and civil penalties.
General Revenue-Related Funds, Five- Year Impact:
Fiscal Year
Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2022
($2,446,101)
2023
($956,035)
2024
($956,035)
2025
($958,859)
2026
($956,035)
All Funds, Five-Year Impact:
Fiscal Year
Probable (Cost) from General Revenue Fund 1
Change in Number of State Employees from FY 2021
2022
($2,446,101)
1.2
2023
($956,035)
1.2
2024
($956,035)
1.2
2025
($958,859)
1.2
2026
($956,035)
1.2
Fiscal Analysis
In Section 1, the bill would require DPS to recruit public and commercial television and radio broadcasters, private commercial entities, state or local governmental entities, the public, and other appropriate persons to assist in developing and implementing the blackout alert system. DPS would also be required to confirm the accuracy of and issue blackout alerts through this system.
Section 5 of the bill would require gas well operators to implement measures to prepare for a weather emergency, which the Railroad Commission (RRC) would establish by rule. Section 21 of the bill would require the RRC to adopt rules regarding measures gas pipeline facility operators must implement to prepare gas pipeline facilities for extreme weather conditions.
Section 12 of the bill would require the PUC to by rule require providers of generation service to implement measures to prepare the provider's generation assets for winter weather emergencies. It would also require inspection of generation assets in the ERCOT power region for compliance with the reliability standards.
Methodology
TDEM would coordinate with DPS and agencies participating in a blackout alert to update applicable plans, including ESFs 2 and 12 Communications and Energy respectively, and Warning Support Annex. In efforts to adequately provide support to local jurisdictions TDEM has identified the need for one FTE to assist in the planning and preparedness functions needed to carry out the bill. TDEM indicates it would need a Planner III ($65,000 per fiscal year), and a part-time Program Specialist V ($13,000 per fiscal year). TDEM also notes a cost of $69,295 in FY 2022 and $52,669 in FY 2023 and beyond for other operating costs and employee supplies/travel, and $25,366 per year in employee benefits. A cost of $2,824 in FY 2025 is related to anticipated software upgrades. This results in a cost to General Revenue of $172,661 in FY2022 and $156,035 in FY 2023, FY 2024, and FY 2026 and $158,859 in FY 2025.
The Railroad Commission (RRC) indicates it would need a professional services contract for weatherization assessment reviews. The RRC also anticipates it would need an IT solution to track gas well interruptions. The RRC anticipates it will need a professional services contract for weatherization assessment reviews at a cost of $1,600,000 in FY 2022 and $800,000 thereafter for on-going reviews of incremental changes. The Commission anticipates it will need to review operator plans to ensure the measures taken to continue operations are appropriate and adequate for different types of weather emergencies. There are over 108,300 producing gas wells and over 425,000 miles of intrastate pipelines in Texas. The number of gas processing plants and compressor stations is unknown.
The PUC anticipates that to complete a rulemaking project relating to weatherization standards, the agency would need to hire a consultant to review current best practices and make recommendations for unit-specific weatherization standards in the ERCOT region. PUC analysis assumes that this would be funded by the ERCOT system administration fee and that the PUC would enter into a three-party contract with ERCOT and the contractor selected through the State's Request For Proposal process. The PUC notes that ERCOT would not direct any of the work, but would provide input and funding to complete the rulemaking. The PUC estimates that a consulting contract for this purpose may cost up to $750,000.
Technology
The Railroad Commission anticipates it would need to develop new online systems to track gas well and pipeline preparedness and forced production interruptions. The systems would allow operators to submit the necessary data for Commission staff to review and create reports. The systems would track the data and compare data submitted to determine those that did not produce during a weather emergency lasting less than 30 days. This cost in FY 2022 is estimated to be $673,440 in General Revenue.
Local Government Impact
The bill would require municipally owned utilities to weatherize generating facilities to comply with new PUC rules, which the PUC anticipates would have a significant impact on local governments. However, the fiscal implications of the bill cannot be determined at this time.
Source Agencies:
212 Office of Court Admin, 300 Trusteed Programs - Gov, 302 Office of the Attorney General, 405 Department of Public Safety, 455 Railroad Commission, 473 Public Utility Commission of Texas, 575 TX Division of Emergency Management, 582 Commission on Environmental Quality, 601 Department of Transportation