BILL ANALYSIS

Senate Research Center	C.S.S.B. 6
88R21632 JXC-F	By: Schwertner; King
	Business & Commerce
	4/3/2023
	Committee Report (Substituted)

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Winter Storm Uri revealed the failures in our electricity market, specifically the lack of reliability. While reforms from S.B. 3, 87th Legislative Session, addressed many critical system issues, S.B. 6 seeks to address increased reliability related specifically to dispatchable generation. S.B. 6 guarantees "steel in the ground" to serve as the state's energy insurance policy. It also provides low-interest loans for existing dispatchable generators as a mechanism for generators to access capital needed to maintain and make necessary improvements to existing generation resources.

(Original Author's/Sponsor's Statement of Intent)

C.S.S.B. 6 amends current law relating to the establishment of the Texas Energy Insurance Program and other funding mechanisms to support the construction and operation of electric generating facilities.

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Public Utility Commission of Texas in SECTION 1.09 (Section 36.502, Utilities Code), SECTION 1.16, and SECTION 2.01 (Section 34.0109, Utilities Code) of this bill.

SECTION BY SECTION ANALYSIS

ARTICLE 1. TEXAS ENERGY INSURANCE PROGRAM

SECTION 1.01. Amends Section 11.003(16), Utilities Code, to redefine "rate."

SECTION 1.02. Reenacts Section 31.002(6), Utilities Code, as amended by Chapters 255 (H.B. 1572) and 389 (S.B. 1202), Acts of the 87th Legislature, Regular Session, 2021, and amends it to redefine "electric utility."

SECTION 1.03. Amends Section 31.002, Utilities Code, by amending Subdivisions (10), (15), (19), and (20) and adding Subdivisions (15-a) and (18-a) to redefine "power generation company," "rate," "transmission and distribution utility," and "transmission service" and define "reliability asset" and "Texas Energy Insurance Program."

SECTION 1.04. Amends Section 33.001, Utilities Code, by adding Subsection (b), to provide that the governing body of a municipality does not have jurisdiction over the Texas Energy Insurance Program.

SECTION 1.05. Amends Section 33.008(a), Utilities Code, as follows:

(a) Prohibits a municipality from imposing a charge for the use of a municipal street, alley, or public way to deliver electricity to a retail customer on certain entities, including the Texas Energy Insurance Program. Makes nonsubstantive changes.

SECTION 1.06. Amends Section 35.004, Utilities Code, by amending Subsections (b) and (c) and adding Subsection (i), as follows:

(b) Requires the Public Utility Commission of Texas (PUC) to ensure that an electric utility or transmission and distribution utility provides nondiscriminatory access to wholesale transmission service for certain entities, including entities operating under Section 39.360.

(i) Provides that services provided by reliability assets when dispatched under Section 38.079 are not considered to be ancillary services.

SECTION 1.07. Amends Section 35.005, Utilities Code, by amending Subsection (a) and adding Subsections (d), (e), (f), (g), and (h), as follows:

(a) Authorizes the PUC to require an electric utility to provide transmission service at wholesale to certain entities, including an entity operating under Section 39.360, and to determine whether terms for the transmission service are reasonable.

(d) Requires the independent organization certified under Section 39.151 (Essential Organizations) for the Electric Reliability Council of Texas (ERCOT) power region, to ensure customers in the ERCOT power region can receive promptly the benefits associated with the Texas Energy Insurance Program, to work with electric utilities to ensure that each reliability asset is fully interconnected in the ERCOT power region not later than the date the reliability asset is ready for commercial operation. Requires the independent organization certified under Section 39.151 for the ERCOT power region to give priority to interconnecting each reliability asset. Requires an electric utility that enters into an interconnection agreement for a reliability asset to give priority to interconnecting the reliability asset and complete construction of any facilities necessary to interconnect the reliability asset not later than the date the reliability asset is ready for commercial operation.

(e) Provides that the deadline established by Subsection (d), if the PUC receives an application under Chapter 37 (Certificates of Convenience and Necessity) for a certificate of convenience and necessity related to facilities necessary to interconnect a reliability asset, as described by Subsection (d), and does not approve the application before the 90th day after the date the PUC received the application, is extended one day for each day after the 90th day in which the PUC does not approve the application.

(f) Authorizes the PUC to extend the deadline established by Subsection (d) after notice, hearing, and a determination on a showing of good cause that fully interconnecting the reliability asset before the deadline is not feasible.

(g) Provides that a transmission facility constructed to interconnect a reliability asset, as described by Subsection (d), is considered to be necessary for the service, accommodation, convenience, or safety of the public for the purposes of Chapter 37.

(h) Requires the PUC to permit an electric utility that constructs and operates interconnecting facilities for a reliability asset to recover the reasonable and necessary costs incurred to interconnect the reliability asset.

SECTION 1.08. Amends Section 36.001, Utilities Code, by adding Subsection (c), as follows:

(c) Authorizes the PUC to regulate the rates of certified entities in the Texas Energy Insurance Program related to each reliability asset only to the extent provided by Subchapter K. Provides that no other provision of Chapter 36 (Rates) applies to rates related to a reliability asset.

SECTION 1.09. Amends Chapter 36, Utilities Code, by adding Subchapter K, as follows:

SUBCHAPTER K. TEXAS ENERGY INSURANCE PROGRAM

Sec. 36.501. PROGRAM RATES. (a) Requires the PUC, if sufficient funding for the Texas Energy Insurance Program is not available from state money, to set a nonbypassable rate that is required to be charged by transmission and distribution utilities, municipally owned utilities, and electric cooperatives in the ERCOT power region to provide funding for the Texas Energy Insurance Program. Requires the transmission and distribution utilities, municipally owned utilities, and electric cooperatives to:

(1) charge the nonbypassable rate to their respective customers or, as appropriate, bill the customer's retail electric provider; and

(2) remit to the independent organization certified under Section 39.151 for the ERCOT power region each month the rate revenue received under Subdivision (1).

(b) Requires the independent organization certified under Section 39.151 for the ERCOT power region to remit the rate revenue received under Subsection (a)(2) to the Comptroller of Public Accounts of the State of Texas (comptroller).

(c) Requires that the nonbypassable rate required by Subsection (a) be based on all reliability asset rates approved under this section.

(d) Requires the PUC to set just and reasonable rates for each entity operating under Section 39.360 for constructing, owning, operating, and maintaining reliability assets. Requires that the rates:

(1) except as provided by Subdivision (2), be based on the entity's just and reasonable costs of providing service, including variable costs, allowance for funds used during construction, and all costs of constructing, owning, operating, and maintaining reliability assets, subject to the rate of return on equity accepted by the entity under Section 39.360(h)(1) and to the total cost of reliability assets accepted by the entity under Section 39.360(h)(2); and

(2) ensure that a certified entity does not receive more than $100 million per year in revenue per gigawatt of installed generation capacity operated by the entity in the program.

(e) Requires the PUC, in addition to the considerations required by Subsection (d), to consider the following parameters when setting reliability asset rates for a certified entity:

(1) the entity's capital financing structure, including:

(A) the capital financing structure of any corporation owned by or affiliated with the entity; and

(B) the entity's debt-to-equity ratio, including any debt of the corporate parent that is used to fund any part of the entity's equity;

(2) a 40-year depreciable life;

(3) allowance for funds used during construction;

(4) costs associated with ownership, operations, maintenance, fuel, and other variable costs;

(5) reasonably incurred attorney's fees; and

(6) the estimated costs of constructing the reliability asset before construction has begun and, after the reliability asset is complete, the actual cost of the asset.

(f) Requires the PUC, not later than the 185th day after the date a certified entity submits to the PUC a rate request for a reliability asset, to set the reliability asset rate. Requires the PUC to incorporate the approved rate into the PUC's calculations of the nonbypassable rate under Subsection (a) and require the newly calculated nonbypassable rate to be collected beginning on the date the reliability asset is commissioned.

(g) Requires the comptroller to disburse in monthly amounts determined by the PUC to each certified entity for which the PUC has set a reliability asset rate under this section the rate revenue to which the certified entity is entitled.

(h) Requires the PUC, not later than the 185th day after the commercial operation date of a reliability asset, to:

(1) adjust the previously established rates for the asset to reflect the actual construction costs if the PUC determines those costs were prudently incurred; and

(2) in collaboration with the independent organization certified under Section 39.151 for the ERCOT power region, reconcile any over-collections or under-collections.

(i) Requires the PUC to adjust the rates for each reliability asset annually to reflect changes to the costs of ownership, operations and maintenance, and variable costs, including fuel costs and interest rates. Requires that the adjustment be based on an annual filing by the certified entity that shows the actual costs the entity incurred over the preceding year. Requires the PUC to apply any market revenues earned by the certified entity for the operation of the reliability asset under Section 38.079 in the prior year as an offset to the rates. Provides that the review for a rate adjustment under this subsection is limited to verifying the accuracy of the incurred costs, the reconciliation of any over-collections or under-collections, and the calculation of the rates. Provides that a certified entity is not entitled to recover more than $10 million per year for a single capital cost unless the PUC approves the cost before the entity incurs the cost.

Sec. 36.502. STRANDED COST RECOVERY. Requires the PUC by rule to establish a process to allow certified entities in the Texas Energy Insurance Program to recover stranded costs if the Texas Energy Insurance Program is repealed or lacks sufficient funding.

SECTION 1.10. Amends Subchapter D, Chapter 38, Utilities Code, by adding Section 38.079, as follows:

Sec. 38.079. TEXAS ENERGY INSURANCE PROGRAM. (a) Authorizes reliability assets to be dispatched by the independent organization certified under Section 39.151 for the ERCOT power region in a manner that minimizes wholesale electric market effects. Authorizes dispatch to occur:

(1) when the independent organization determines that without generation by a regional reliability asset, an overload of a transmission system element will result in load shed for that region;

(2) when the independent organization determines that the operation of a reliability asset is needed to resolve an actual or anticipated violation of transmission security criteria;

(3) as a last resort to avoid ordering involuntary load shedding; and

(4) for not more than 336 hours per year for testing purposes and as directed by the independent organization.

(b) Requires the PUC to require the independent organization to:

(1) develop deployment criteria and protocols for reliability assets, including a maximum notice time for deployment, minimum run times, and other operational requirements needed to support reliability; and

(2) allow the state to collect revenue under Section 36.501(b) but ensure that reliability assets do not participate in the day-ahead or real-time ERCOT markets.

(c) Requires the PUC to address long-term resource adequacy and investment in the wholesale electric market in conjunction with implementation of the Texas Energy Insurance Program.

SECTION 1.11. Amends Section 39.154, Utilities Code, by adding Subsection (f) to provide that a reliability asset, for purposes of Section 39.154 (Limitation of Ownership of Installed Capacity) and Section 39.158 (Mergers and Consolidations), is not considered to be installed generation capacity.

SECTION 1.12. Amends Section 39.155, Utilities Code, by amending Subsections (a) and (b) and adding Subsection (e), as follows:

(a) Requires certain entities, other than an entity operating under Section 39.360, to report to the PUC certain information.

(b) Requires that the reports required by this subsection include a section identifying existing and potential transmission constraints that could affect the availability of any reliability asset and include alternatives for meeting identified needs.

(e) Provides that entities operating under Section 39.360 are not considered to have market power when dispatched by an order of the independent organization certified under Section 39.151 for the ERCOT power region.

SECTION 1.13. Amends Subchapter H, Chapter 39, Utilities Code, by adding Section 39.360, as follows:

Sec. 39.360. CERTIFICATION OF TEXAS ENERGY INSURANCE PROGRAM. (a) Authorizes the PUC to certify one or more entities to operate as participants in the Texas Energy Insurance Program by owning and operating reliability assets. Provides that the PUC is authorized to certify any number of entities to operate any number of reliability assets, but is prohibited from certifying a total of more than 10 gigawatts of generating capacity for the entire Texas Energy Insurance Program.

(b) Prohibits an entity from operating as part of the Texas Energy Insurance Program unless the entity is certified by the PUC under this section.

(1) issue at least one request for proposals from qualified applicants to serve as part of the Texas Energy Insurance Program; and

(2) if the PUC receives at least two applications from qualified applicants in response to the request described by Subdivision (1) before the expiration of the period provided by Subsection (e), select and certify at least two qualified applicants not later than the 90th day after the date the PUC issues the request.

(d) Authorizes the PUC, to ensure efficient distribution of reliability assets, to designate regions in the ERCOT power region and issue requests for proposals under Subsection (c) for specific amounts of generation capacity by region.

(e) Requires an applicant to submit an application under Subsection (c) not later than the 60th day after the date the PUC issues a request for proposals under that subsection.

(f) Authorizes an entity that is prohibited by Title 2 (Public Utility Regulatory Act) from owning or operating a generation asset to apply to be certified to be part of the Texas Energy Insurance Program under this section.

(g) Requires an applicant, to be certified as part of the Texas Energy Insurance Program, to:

(1) establish financial stability and expertise by demonstrating that:

(A) the applicant or the applicant's parent company or operating partner has an investment grade credit rating; and

(B) the applicant or the applicant's parent company or operating partner is able to fund the investment as demonstrated by proof of access to adequate financing;

(2) establish industry expertise by demonstrating that the applicant is a river authority that owns or operates generation facilities, an electric utility, a municipally owned utility, or an electric cooperative, or the applicant or the applicant's parent company owns or operates electric generation assets totaling at least 2,500 megawatts;

(3) establish project quality standards by demonstrating that:

(A) the applicant is able to provide a parent performance guarantee that the independent organization certified under Section 39.151 for the ERCOT power region or the PUC are authorized to draw upon during each season, as defined by the independent organization, if a reliability asset does not perform and performance is not excused under Subsection (m), in the amount of $400 million for every gigawatt of generating capacity for which the applicant is applying to be certified; and

(B) each reliability asset will be weatherized, capable of starting up and generating electricity without requiring outside power or support from the grid, and in operation not later than the last day of the 48th month after certification, unless interconnection delays require a later operation date; and

(4) pledge:

(A) that any net revenue earned during testing or operating would be for the benefit of the ERCOT power region; and

(B) not to sell any reliability asset over the life of the reliability asset while the applicant is certified as part of the Texas Energy Insurance Program without prior approval of the PUC.

(h) Requires each applicant to provide in the application a statement:

(1) agreeing to a rate of return on equity the applicant will accept while operating as part of the Texas Energy Insurance Program, which is prohibited from exceeding 10 percent;

(2) of the total cost of reliability assets for which the applicant will request recovery under Subchapter K, Chapter 36, while operating as part of the Texas Energy Insurance Program, which is prohibited from exceeding $1 billion per gigawatt of installed generation capacity operated in the program; and

(3) agreeing to the rates and revenues authorized under Subchapter K, Chapter 36.

(i) Authorizes the PUC to certify an entity to be part of the Texas Energy Insurance Program if the entity submits a qualifying application that includes:

(1) proof that the requirements of Subsection (g) have been met;

(2) a description of the location or proposed location of each reliability asset;

(3) a commitment to construct, own, operate, and maintain reliability assets for a time period not less than the useful life of the assets;

(4) a commitment that the reliability assets will include at each site resources to allow the provision of generation at full load for at least 168 continuous hours or the maximum number of continuous hours authorized for continuous operation under permits issued under state and federal law;

(5) an affidavit affirming that the reliability assets will be available to dispatch in a manner that provides the independent organization certified under Section 39.151 for the ERCOT power region, in times of emergency, natural disaster, and testing, with access to power at full output for up to seven consecutive days, after accounting for ramp up and ramp down times required by the independent organization;

(6) proof of the posting of a parent performance guarantee that the independent organization certified under Section 39.151 for the ERCOT power region or the PUC are authorized to draw upon during each season, as defined by the independent organization, if a reliability asset does not perform and performance is not excused under Subsection (m), in the amount of $400 million for every gigawatt of generating capacity for which the applicant is applying to be certified;

(7) proof that the applicant or the applicant's parent company or operating partner meets the requirements of Subsection (g)(1); and

(8) proof that the applicant can follow telemetry from the independent organization certified under Section 39.151 for the ERCOT power region.

(j) Requires the PUC to provide a process to amend a certificate to account for the addition of any new reliability asset.

(k) Prohibits the PUC from revoking a certificate unless after notice and an opportunity for hearing before the PUC, the PUC finds that the certified entity:

(1) failed to dispatch sufficient energy from reliability assets when called upon by the independent organization certified under Section 39.151 for the ERCOT power region or the PUC and the failure cannot be excused by factors outside the entity's control;

(2) has not fulfilled commitments made in the entity's application or complied with statutory or regulatory requirements of being certified, after reasonable notice from the PUC; or

(3) no longer meets the eligibility requirements for participating in the Texas Energy Insurance Program, unless the entity has presented an actionable plan acceptable to the PUC to meet the requirements.

(l) Requires each certified entity to comply with the commissioning requirements and reliability standards adopted by the independent organization certified under Section 39.151 for the ERCOT power region to ensure the reliability of the ERCOT region.

(m) Prohibits the PUC or the independent organization certified under Section 39.151 for the ERCOT power region from drawing upon a parent performance guarantee provided by a certified entity and from imposing a fine or penalty on a certified entity for failure to provide service to the extent that the inability to provide service is the result of:

(1) the actions of a transmission service provider related to transmission service; or

(2) the actions of the independent organization certified under Section 39.151 for the ERCOT power region, including scheduled routine maintenance.

(n) Prohibits the PUC from requiring a bond, letter of credit, or other security from a certified entity except for a parent performance guarantee described by this section and from requiring the expansion of a parent performance guarantee. Prohibits a parent performance guarantee, if drawn upon, from being required to be replenished or expanded. Authorizes the PUC, if the parent performance guarantee for a reliability asset is exhausted, to decertify the certified entity to operate the asset. Authorizes the PUC to consult with the Legislative Budget Board in implementing this subsection.

(o) Authorizes a certification issued under this section to be transferred only with the prior approval of the PUC. Requires a certified entity, before transferring ownership of a reliability asset to another entity, to apply to the PUC for permission to transfer the asset. Prohibits the PUC from approving the transfer of a reliability asset that is sold unless the sale is conditioned on the purchaser owning, operating, and maintaining the asset for the duration of the commitment made under Subsection (i)(3). Provides that a transfer of a reliability asset under this subsection does not affect the participation of the asset in the Texas Energy Insurance Program. Requires the PUC, if the PUC does not approve the transfer and the entity sells the asset, to decertify the entity to operate that asset as part of the Texas Energy Insurance Program.

(p) Requires the PUC, on the request of a certified entity, after the 40th anniversary of the commissioning date of a reliability asset, to decertify the entity to operate the asset as a reliability asset and allow the entity to apply to operate the asset in the competitive market.

SECTION 1.14. Amends Section 382.05155, Health and Safety Code, by adding Subsection (b-1) to provide that a permit for a reliability asset, as defined by Section 31.002, Utilities Code, is considered to benefit the economy of this state for the purposes of Subsection (b).

SECTION 1.15. Requires the PUC, not later than February 1, 2024, to issue a request for proposals required by Section 39.360(c), Utilities Code, as added by this article.

SECTION 1.16. Requires the PUC to adopt any rules necessary to implement this article not later than December 1, 2023.

SECTION 1.17. Provides that this article, to the extent of any conflict, prevails over another Act of the 88th Legislature, Regular Session, 2023, relating to nonsubstantive additions to and corrections in enacted codes.

SECTION 1.18. Provides that this article takes effect September 1, 2023.

ARTICLE 2. GENERATING FACILITY FUNDING

SECTION 2.01. Amends Subtitle B, Title 2, Utilities Code, by adding Chapter 34, as follows:

CHAPTER 34. GENERATING FACILITY FUNDING

Sec. 34.0101. DEFINITIONS. Defines "advisory committee," "fund," and "trust company."

Sec. 34.0102. FUND. (a) Provides that the Texas energy insurance fund (fund) is a special fund in the state treasury outside the general revenue fund to be administered and used by the PUC for the purposes authorized by this chapter. Authorizes the PUC to establish separate accounts in the fund.

(b) Provides that the fund and the fund's accounts are kept and held by the Texas Treasury Safekeeping Trust Company (trust company) for and in the name of the PUC.

(d) Provides that the fund consists of:

(1) money appropriated, credited, transferred, or deposited to the credit of the fund by or as authorized by law, including money from any source transferred or deposited to the credit of the fund at the PUC's discretion;

(2) revenue that the legislature by statute dedicates for deposit to the credit of the fund;

(3) investment earnings and interest earned on money in the fund; and

(4) gifts, grants, and donations contributed to the fund.

Sec. 34.0103. LOANS FOR MAINTENANCE AND MODERNIZATION. (a) Authorizes the PUC to use money in the fund without further appropriation to provide loans to finance maintenance or modernization of dispatchable electric generating facilities operating in the ERCOT power region. Provides that a generating facility, for the purposes of this section, is considered to be dispatchable if the facility's output can be controlled primarily by forces under human control.

(b) Requires the PUC, each year, to produce a list of dispatchable electric generating facilities operating in the ERCOT power region and estimate the potential costs to maintain and modernize the facilities during the following five years. Requires the PUC to give priority to loan applications under this section that the PUC determines will provide the highest ratio of dispatchable megawatts maintained to project costs.

(1) efforts and achievements in conserving resources;

(2) quality of services;

(3) efficiency of operations;

(4) quality of management;

(5) proposed improvement in availability of the generation facility for which the loan is requested; and

(6) previous Texas energy insurance fund loan history, with a preference toward entities that have not applied for or been granted a loan previously.

(d) Authorizes the PUC to provide a loan under this section only for maintenance or modernization of a facility that is capable of operating for at least five years after the date the loan is received.

(e) Prohibits the proceeds of a loan received under this section from being used for:

(1) compliance with weatherization standards adopted after December 1, 2023;

(2) debt payments; or

(3) expenses not related to maintaining or modernizing the electric generating facility.

(f) Prohibits an electric utility from receiving a loan under this section.

(g) Authorizes the PUC to require immediate repayment of a loan issued under this section if the recipient of the loan stops operating the facility for which the loan was received before the fifth anniversary of the date on which the loan was disbursed.

(h) Prohibits a loan provided under this chapter from bearing an interest rate of more than zero percent.

(i) Provides that information submitted to the PUC in an application for a loan under this chapter is confidential and not subject to disclosure under Chapter 552 (Public Information), Government Code.

Sec. 34.0104. SOURCES OF MONEY FOR LOANS FOR TEXAS ENERGY INSURANCE PROGRAM RELIABILITY ASSETS. Authorizes the PUC to use any money appropriated to the PUC for the purpose of providing a loan, at zero percent interest, to an entity certified under Section 39.360 to be used to reduce debt associated with constructing or operating a reliability asset. Authorizes the PUC to use without legislative appropriation money from the fund for that purpose.

Sec. 34.0105. MAXIMUM LOAN AMOUNT. Prohibits the amount of the loan awarded, if the PUC has more than four pending applications for loans to be made from the fund on the date the PUC awards a loan, from exceeding 25 percent of the fund balance on that date.

Sec. 34.0106. MANAGEMENT AND INVESTMENT OF FUND. (a) Requires the trust company to hold the fund, and any accounts established in the fund, for and in the name of the PUC, taking into account the purposes for which money in the fund is authorized to be used. Authorizes the fund to be invested with the state treasury pool and comingled with other investments.

(b) Provides that the overall objective for the investment of the fund is to maintain sufficient liquidity to meet the needs of the fund while striving to preserve the purchasing power of the fund.

(c) Authorizes the trust company, in managing the assets of the fund, to acquire, exchange, sell, supervise, manage, or retain any kind of investment that a prudent investor, exercising reasonable care, skill, and caution, would acquire or retain in light of the purposes, terms, distribution requirements, and other circumstances of the fund then prevailing, taking into consideration the investment of all the assets of the fund rather than a single investment.

(d) Requires that the reasonable expenses of managing the fund's assets be paid from the fund.

(e) Requires the trust company annually to provide a written report to the PUC and to the Texas Energy Insurance Fund Advisory Committee (advisory committee) with respect to the investment of the fund.

(f) Requires the trust company to adopt a written investment policy that is appropriate for the fund. Requires the trust company to present the investment policy to the investment advisory board established under Section 404.028 (Investment Advisory Board), Government Code. Requires the investment advisory board to submit to the trust company recommendations regarding the policy.

(g) Requires the PUC to annually provide to the trust company a forecast of the cash flows into and out of the fund. Requires the PUC to provide updates to the forecasts as appropriate to ensure that the trust company is able to achieve the objective specified by Subsection (b).

(h) Requires the trust company to disburse money from the fund as directed by the PUC.

Sec. 34.0107. RECEIVERSHIP OF DEFAULT GENERATING FACILITY. (a) Defines "default."

(b) Prohibits the state, including the PUC, the advisory committee, and the trust company, from retaining an ownership interest in a project or facility for which a loan is provided under this chapter.

(c) Requires the attorney general, in the event of a default on a loan made under this chapter, at the request of the PUC, to bring suit in a district court in Travis County for the appointment of a receiver to collect the assets and carry on the business of a loan recipient if the action is necessary to cure a default by the recipient.

(d) Requires the court to vest a receiver appointed by the court with any power or duty the court finds necessary to cure the default, including the power or duty to:

(1) perform audits;

(2) direct ongoing operation of the assets;

(3) fund reserve accounts;

(4) make payments of the principal of or interest on bonds, securities, or other obligations; and

(5) take any other action necessary to prevent or to remedy the default, including the sale of assets.

(e) Requires the receiver to execute a bond in an amount to be set by the court to ensure the proper performance of the receiver's duties.

(f) Requires the receiver, after appointment and execution of bond, to take possession of the books, records, accounts, and assets of the defaulting loan recipient specified by the court. Requires the receiver, until discharged by the court, to perform the duties that the court directs and to strictly observe the final order involved.

(g) Authorizes the court, on a showing of good cause by the defaulting loan recipient, to dissolve the receivership.

Sec. 34.0108. TEXAS ENERGY INSURANCE FUND ADVISORY COMMITTEE. (a) Provides that the advisory committee is composed of the following six members:

(1) three members of the senate appointed by the lieutenant governor, including:

(A) a member of the committee of the senate having primary jurisdiction over matters relating to the generation of electricity; and

(B) a member of the committee of the senate having primary jurisdiction over finance; and

(2) three members of the house of representatives appointed by the speaker of the house of representatives, including:

(A) a member of the committee of the house of representatives having primary jurisdiction over the generation of electricity; and

(B) a member of the committee of the house of representatives having primary jurisdiction over finance.

(b) Provides that a member of the advisory committee serves at the will of the person who appointed the member.

(c) Requires the lieutenant governor to appoint a co-presiding officer of the advisory committee from among the members appointed by the lieutenant governor. Requires the speaker of the house of representatives to appoint a co-presiding officer of the advisory committee from among the members appointed by the speaker.

(d) Authorizes the advisory committee to hold public hearings, formal meetings, and work sessions. Authorizes either co-presiding officer of the advisory committee to call a public hearing, formal meeting, or work session of the advisory committee at any time. Prohibits the advisory committee from taking formal action at a public hearing, formal meeting, or work session unless a quorum of the committee is present.

(e) Provides that a member of the advisory committee, except as otherwise provided by this subsection, is not entitled to receive compensation for service on the committee or reimbursement for expenses incurred in the performance of official duties as a member of the committee. Provides that service on the advisory committee by a member of the senate or house of representatives is considered legislative service for which the member is entitled to reimbursement and other benefits in the same manner and to the same extent as for other legislative service.

(f) Provides that the advisory committee:

(1) is authorized to provide comments and recommendations to the PUC for the PUC to use in adopting rules regarding the use of the fund or on any other matter; and

(2) is required to review the overall operation, function, and structure of the fund at least semiannually.

(g) Authorizes the advisory committee to adopt rules, procedures, and policies as needed to administer this section and implement its responsibilities.

(h) Provides that Chapter 2110 (State Agency Advisory Committees), Government Code, does not apply to the size, composition, or duration of the advisory committee.

(i) Provides that the advisory committee is subject to Chapter 325 (Sunset Law), Government Code. Provides that the advisory committee, unless continued in existence as provided by that chapter, is abolished September 1, 2035.

Sec. 34.0109. RULES. (a) Authorizes the PUC by rule to establish procedures for the application for and award of a loan under this chapter and for the administration of the fund.

(b) Requires the PUC to give full consideration to comments and recommendations of the advisory committee before the PUC adopts rules under this chapter.

Sec. 34.0110. TEXAS ENERGY INSURANCE PROGRAM CUSTOMER PAYMENTS. (a) Authorizes the PUC to use any money appropriated to the PUC for the purpose of offsetting amounts owed to certified entities under Section 36.501 on behalf of customers of transmission and distribution utilities, municipally owned utilities, and electric cooperatives. Authorizes the PUC to use without legislative appropriation money from the fund for that purpose.

(b) Requires the comptroller to deposit revenue received under Section 36.501(b) to the credit of the fund.

(c) Requires that money obtained by the independent organization certified under Section 39.151 for the ERCOT power region or the PUC through drawing upon a parent performance guarantee as described by Section 39.360(g)(3) be deposited to the credit of the fund.

(d) Requires the comptroller to make the disbursements required by Section 36.501(g) from the fund.

SECTION 2.02. Provides that this article is contingent upon approval by the voters of the constitutional amendment proposed by the 88th Legislature, Regular Session, 2023, providing for the creation of the Texas energy insurance fund and the authorization of other funding mechanisms to support the construction and operation of electric generating facilities.