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A BILL TO BE ENTITLED
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AN ACT
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relating to the procurement and operation of backup generation |
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facilities for the ERCOT power region. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 31.002, Utilities Code, is amended by |
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adding Subdivision (3-a) to read as follows: |
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(3-a) "Backup generation facility" means an electric |
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generation facility operated under Subchapter O, Chapter 39. |
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SECTION 2. Section 35.004(b), Utilities Code, is amended to |
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read as follows: |
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(b) The commission shall ensure that an electric utility or |
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transmission and distribution utility provides nondiscriminatory |
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access to wholesale transmission service for qualifying |
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facilities, exempt wholesale generators, power marketers, power |
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generation companies, retail electric providers, backup generation |
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facility operators, and other electric utilities or transmission |
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and distribution utilities. |
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SECTION 3. Section 35.005(a), Utilities Code, is amended to |
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read as follows: |
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(a) The commission may require an electric utility to |
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provide transmission service at wholesale to another electric |
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utility, a qualifying facility, an exempt wholesale generator, a |
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backup generation facility operator, or a power marketer and may |
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determine whether terms for the transmission service are |
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reasonable. |
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SECTION 4. Chapter 39, Utilities Code, is amended by adding |
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Subchapter O to read as follows: |
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SUBCHAPTER O. BACKUP GENERATION FACILITIES |
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Sec. 39.701. PURPOSE; LIMITATION. (a) The purpose of this |
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subchapter is to establish a program to allow the comptroller, in |
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consultation with the commission, to contract with entities for the |
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construction and operation of at least 5,000 megawatts of |
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generating capacity powered by nuclear energy or natural gas for |
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the ERCOT power region. |
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(b) Not later than January 31, 2024, the commission shall |
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determine whether market participants have contracted for the |
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installation of at least 5,000 megawatts of new generation capacity |
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for the ERCOT power region compared to the amount of installed |
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generation capacity on January 1, 2023. |
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(c) If the commission determines under Subsection (b) that |
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market participants have contracted for the installation of at |
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least 5,000 megawatts of new generation capacity for the ERCOT |
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power region, the comptroller may not enter into a contract under |
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this subchapter. |
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Sec. 39.702. CONSTRUCTION AND OPERATION OF BACKUP |
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GENERATION FACILITY. (a) The comptroller may contract with one or |
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more entities to construct or operate backup generation facilities |
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in the manner provided by this subchapter. The comptroller may use |
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any procurement method that provides the best value to the state, |
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including a method authorized by Chapter 2267, Government Code. |
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(b) A contract must provide that an entity that constructs |
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or operates a backup generation facility: |
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(1) is entitled to payments from the state for the |
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construction or operation of a backup generation facility equal to |
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103 percent of the actual costs of constructing or operating the |
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facility; |
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(2) is not entitled to sell electric energy from the |
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backup generation facility; |
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(3) may not sell the backup generation facility |
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without the permission of the comptroller; and |
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(4) shall provide electric energy for the ERCOT power |
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region as directed by the independent system operator in times of |
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high demand and low supply. |
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(c) A backup generation facility constructed under this |
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subchapter: |
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(1) is the property of the state; and |
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(2) is not considered to be installed generation |
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capacity for the purposes of Sections 39.154 and 39.158. |
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(d) An entity is eligible to operate a backup generation |
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facility under this subchapter only if the entity is authorized by |
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this title to generate electric energy at wholesale. |
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(e) If a backup generation facility is constructed under |
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this subchapter, the commission shall: |
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(1) annually evaluate the reserve margin for the ERCOT |
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power region; and |
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(2) determine whether the reserve margin equals at |
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least 15 percent of peak electric demand over the preceding two |
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years. |
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(f) If the condition under Subsection (e)(2) is met, the |
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comptroller shall sell each backup generation facility constructed |
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under this subchapter. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2023. |