88R13225 JXC-D
 
  By: Parker S.B. No. 1378
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the procurement and operation of backup generation
  facilities for the ERCOT power region.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 31.002, Utilities Code, is amended by
  adding Subdivision (3-a) to read as follows:
               (3-a)  "Backup generation facility" means an electric
  generation facility operated under Subchapter O, Chapter 39.
         SECTION 2.  Section 35.004(b), Utilities Code, is amended to
  read as follows:
         (b)  The commission shall ensure that an electric utility or
  transmission and distribution utility provides nondiscriminatory
  access to wholesale transmission service for qualifying
  facilities, exempt wholesale generators, power marketers, power
  generation companies, retail electric providers, backup generation
  facility operators, and other electric utilities or transmission
  and distribution utilities.
         SECTION 3.  Section 35.005(a), Utilities Code, is amended to
  read as follows:
         (a)  The commission may require an electric utility to
  provide transmission service at wholesale to another electric
  utility, a qualifying facility, an exempt wholesale generator, a
  backup generation facility operator, or a power marketer and may
  determine whether terms for the transmission service are
  reasonable.
         SECTION 4.  Chapter 39, Utilities Code, is amended by adding
  Subchapter O to read as follows:
  SUBCHAPTER O. BACKUP GENERATION FACILITIES
         Sec. 39.701.  PURPOSE; LIMITATION. (a) The purpose of this
  subchapter is to establish a program to allow the comptroller, in
  consultation with the commission, to contract with entities for the
  construction and operation of at least 5,000 megawatts of
  generating capacity powered by nuclear energy or natural gas for
  the ERCOT power region.
         (b)  Not later than January 31, 2024, the commission shall
  determine whether market participants have contracted for the
  installation of at least 5,000 megawatts of new generation capacity
  for the ERCOT power region compared to the amount of installed
  generation capacity on January 1, 2023.
         (c)  If the commission determines under Subsection (b) that
  market participants have contracted for the installation of at
  least 5,000 megawatts of new generation capacity for the ERCOT
  power region, the comptroller may not enter into a contract under
  this subchapter.
         Sec. 39.702.  CONSTRUCTION AND OPERATION OF BACKUP
  GENERATION FACILITY. (a) The comptroller may contract with one or
  more entities to construct or operate backup generation facilities
  in the manner provided by this subchapter. The comptroller may use
  any procurement method that provides the best value to the state,
  including a method authorized by Chapter 2267, Government Code.
         (b)  A contract must provide that an entity that constructs
  or operates a backup generation facility:
               (1)  is entitled to payments from the state for the
  construction or operation of a backup generation facility equal to
  103 percent of the actual costs of constructing or operating the
  facility;
               (2)  is not entitled to sell electric energy from the
  backup generation facility;
               (3)  may not sell the backup generation facility
  without the permission of the comptroller; and
               (4)  shall provide electric energy for the ERCOT power
  region as directed by the independent system operator in times of
  high demand and low supply.
         (c)  A backup generation facility constructed under this
  subchapter:
               (1)  is the property of the state; and
               (2)  is not considered to be installed generation
  capacity for the purposes of Sections 39.154 and 39.158.
         (d)  An entity is eligible to operate a backup generation
  facility under this subchapter only if the entity is authorized by
  this title to generate electric energy at wholesale.
         (e)  If a backup generation facility is constructed under
  this subchapter, the commission shall:
               (1)  annually evaluate the reserve margin for the ERCOT
  power region; and
               (2)  determine whether the reserve margin equals at
  least 15 percent of peak electric demand over the preceding two
  years.
         (f)  If the condition under Subsection (e)(2) is met, the
  comptroller shall sell each backup generation facility constructed
  under this subchapter.
         SECTION 5.  This Act takes effect immediately if it receives
  a vote of two-thirds of all the members elected to each house, as
  provided by Section 39, Article III, Texas Constitution.  If this
  Act does not receive the vote necessary for immediate effect, this
  Act takes effect September 1, 2023.