LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 88TH LEGISLATIVE REGULAR SESSION


April 16, 2023

TO:	Honorable Charles Schwertner, Chair, Senate Committee on Business & Commerce

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB2112 by Johnson (relating to resources used to ensure the continuous provision of power.), Committee Report 1st House, Substituted

Estimated Two-year Net Impact to General Revenue Related Funds for SB2112, Committee Report 1st House, Substituted : a negative impact of ($4,466,695) through the biennium ending August 31, 2025.

General Revenue-Related Funds, Five- Year Impact:

All Funds, Five-Year Impact:

Fiscal Year	Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2024	($2,806,752)
2025	($1,659,943)
2026	($1,689,418)
2027	($1,719,777)
2028	($1,751,048)

Fiscal Year	Probable Savings/(Cost) from General Revenue Fund 1	Change in Number of State Employees from FY 2023
2024	($2,806,752)	9.1
2025	($1,659,943)	9.1
2026	($1,689,418)	9.1
2027	($1,719,777)	9.1
2028	($1,751,048)	9.1

The bill would create the Texas Power Resiliency Fund as a special fund in the state treasury outside the General Revenue Fund to be administered and used, without further appropriation, by the Texas Division of Emergency Management (TDEM).

The fund would consist of money credited, appropriated, or transferred to the fund; revenue dedicated by the legislature; investment returns; and gifts, grants, and other donations. The fund and its accounts would be kept and held by the Texas Treasury Safekeeping Trust Company.

The bill would allow TDEM to provide grants and loans from the new fund, as provided by provisions of the bill, for the operation of a Texas backup power package that met certain criteria. TDEM would be required to convene an advisory committee to recommend criteria to employ in making a grant or loan.

The bill would require TDEM to contract with a research entity with experience in microgrid design to analyze critical facility characteristics and requirements in the state and develop specifications for Texas backup power packages.

The bill would require the Texas Commission on Environmental Quality (TCEQ) and the Public Utility Commission of Texas (PUC) each to adopt a process to expedite the permitting of a Texas backup power package.

The bill would require the PUC to require transmission and distribution utilities to use good faith efforts to ensure that no distribution feeder was subject to load shedding for more than four consecutive hours in a six-hour period.

The bill would take effect on the date on which the constitutional amendment providing for the creation of the Texas Power Resiliency Fund takes effect. If the joint resolution proposing that amendment (SJR 82) was not enacted, and if the amendment was not approved by the voters, the bill would have no effect.

The Texas Division of Emergency Management (TDEM) estimates that, to implement the bill's provisions, it would need to hire additional staff to establish and administer the program to issue loans. Costs for new FTEs would include 1.0 Associate Director of Operations ($115,261 in fiscal 2024 and $124,655 in fiscal 2025), 1.1 Program Specialist IV ($69,978 per fiscal year), 4.0 Grant Administrators IV ($351,271 in fiscal 2024 and $379,900 in fiscal 2025), 1.0 Financial Analyst II ($76,841 in fiscal 2024 and $83,103 in fiscal 2025), and 2.0 Contract Specialists IV ($153,681 in fiscal 2024 and $166,206 in fiscal 2025). TDEM estimates that to contract for services to implement the new program, there would be a cost of $1.4 million in professional fees and services in fiscal 2024 and $300,000 per fiscal year afterwards. Additionally, TDEM indicates that funds would be needed for other personnel costs, fuels and lubricants, consumable supplies, utilities, travel, building rent, machine and other rent, and other operating expenses.

Based on analyses from the PUC and TCEQ, the bill would have no significant fiscal impact on either agency.

TDEM estimates that there would be a cost of $100,000 for technology development to implement a new grant structure within the agency's current framework. Additionally, there would be some costs related to the additional FTEs for new phones and laptops.

Local Government Impact

The bill could have an impact on local governments, if municipally owned utilities were required to expedite permitting of Texas backup power package. However, the fiscal implications of the bill cannot be determined at this time.

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