LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION
 
March 27, 2023

TO:
Honorable Charles Schwertner, Chair, Senate Committee on Business & Commerce
 
FROM:
Jerry McGinty, Director, Legislative Budget Board
 
IN RE:
SB330 by Hall (Relating to the resilience of the electric grid and certain municipalities; authorizing an administrative penalty.), As Introduced


Estimated Two-year Net Impact to General Revenue Related Funds for SB330, As Introduced : a negative impact of ($925,628) through the biennium ending August 31, 2025.

General Revenue-Related Funds, Five- Year Impact:

Fiscal Year Probable Net Positive/(Negative) Impact to
General Revenue Related Funds
2024($462,814)
2025($462,814)
2026($462,814)
2027($462,814)
2028($462,814)

All Funds, Five-Year Impact:

Fiscal Year Probable Savings/(Cost) from
General Revenue Fund
1

Change in Number of State Employees from FY 2023
2024($462,814)4.0
2025($462,814)4.0
2026($462,814)4.0
2027($462,814)4.0
2028($462,814)4.0


Fiscal Analysis

The bill would create the Texas Grid Security Commission, to be composed of representatives of several state agencies, power generation companies, transmission and distribution utilities, and certain other individuals with expertise in various fields.

The bill would require certain members of the security commission to apply for a secret security clearance or an interim secret security clearance to be granted by the federal government. 

The bill would require the security commission to conduct certain evaluations, including evaluations of all hazards to the ERCOT electric grid, the resilience of municipalities, nuclear generation sites in the state, and certain standards.

The bill would require the security commission to investigate the steps that local communities and other states have taken to address grid resilience. The commission could request funding to conduct site visits to these locations, as required. Based on the findings of these evaluations, the security commission would be required to develop and adopt resilience standards for municipalities and critical components of the ERCOT grid.

The bill would require the State Office of Risk Management (SORM), with assistance from the security commission, to select contractors to identify critical systems and components of the ERCOT grid vulnerable to hazards. An entity that owned or operated a component identified as critical would be required to upgrade the component. SORM would be required to select contractors to verify whether an entity had upgraded its components as required.

The bill would require the security commission, by January 1, 2024, to prepare and deliver a plan for protecting the ERCOT electric grid from all hazards. 

The bill would require the security commission to prepare and deliver an annual report assessing natural and man-made threats to the electric grid and efforts to mitigate the threats.

The bill would require a regulatory authority, in establishing the rates of an electric utility, to include consideration of the costs incurred to install, replace, or upgrade facilities or equipment to meet a resilience standard. 

The bill would require the security commission to establish resilience standards for micro-grids and certify a micro-grid that met those standards. 

The bill would require the Public Utility Commission (PUC) and the Railroad Commission (RRC) to establish certain rules relating to the provisions of the bill. PUC and RRC could impose an administrative penalty on an entity subject to each agency's respective jurisdiction for a violation of a resilience standard.

Methodology

The Public Utility Commission estimates that, to implement the provisions of the bill, the agency would need to hire staff to complete the evaluation, standards, plan, report, and rulemaking, and to establish penalties. The 4.0 additional FTEs include 1.0 Engineer III ($75,000 per fiscal year); 1.0 Program Specialist, who would be a subject matter expert in critical infrastructure security risk management ($90,000 per fiscal year); 1.0 Legal/Rules Attorney III ($90,000 per fiscal year); and 1.0 Investigation/Enforcement Attorney ($90,000 per fiscal year). The agency also anticipates costs for equipment and employee benefits. In total, the fiscal impact would be $462,814 each fiscal year.

It is assumed that any costs to other agencies to implement the provisions of the bill could be absorbed using existing resources.


Local Government Impact

No significant fiscal implication to units of local government is anticipated.


Source Agencies:
300 Trusteed Programs Within the Office of the Governor, 302 Office of the Attorney General, 304 Comptroller of Public Accounts, 401 Military Department, 455 Railroad Commission, 473 Public Utility Commission of Texas, 479 State Office of Risk Management, 575 Texas Division of Emergency Management, 710 Texas A&M University System Administrative and General Offices
LBB Staff:
JMc, SZ, JSM, CFl