BILL ANALYSIS

Senate Research Center	S.B. 2321
	By: King
	Business & Commerce
	7/25/2025
	Enrolled

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Currently, during emergency conditions, the Electric Reliability Council of Texas (ERCOT) or another reliability entity will request that the Texas Commission on Environmental Quality (TCEQ) exercise its enforcement discretion with respect to a generation facility's permitted emissions limits. If TCEQ grants this request, then ERCOT will provide prompt notice to its market participants of TCEQ's determination to waive enforcement. S.B. 2321 memorializes this practice and makes clear that an enforcement waiver extends to emissions from back-up generation facilities.

S.B. 2321 requires TCEQ, upon a request from ERCOT, to exercise its discretion to waive enforcement of emissions limits from generation facilities and on-site back-up generation facilities during emergency conditions.

The bill seeks to provide regulatory certainty to generators and large loads with back-up generation units by automating the enforcement discretion process between ERCOT and TCEQ to maximize generation availability. Additionally, S.B. 2321 signals the state's support for emergency operation plans.

S.B. 2321 amends current law relating to the regulation of emissions by the Texas Commission on Environmental Quality during an event affecting electric demand or grid reliability.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subchapter D, Chapter 382, Health and Safety Code, by adding Section 382.086, as follows:

Sec. 382.086. ENFORCEMENT DURING ELECTRIC DEMAND AND RELIABILITY EVENT. (a) Authorizes the Texas Commission on Environmental Quality (TCEQ) to exercise TCEQ's enforcement discretion to waive enforcement for emissions from electric generation facilities and on-site backup generation facilities in this state during a period requested by an independent system operator if the independent system operator notifies TCEQ that additional electric generation is necessary to mitigate an emergency condition or a significant risk of an emergency condition.

(b) Provides that, after an independent system operator submits a notification to TCEQ under Subsection (a):

(1) the independent system operator is required to notify market participants in this state of the period in the notification during which limits or standards described by Subdivision (2) are prohibited from applying to the operation of an electric generation facility or on-site backup generation facility in this state; and

(2) notwithstanding any other state law and subject to Subsection (d), TCEQ has the discretion to enforce a rule or standard, including an emissions limit or standard, hours of operation limit, or any similar operational limit, against the owner or operator of an electric generation facility or on-site backup generation facility for the period in the notification.

(c) Requires the owner or operator of an electric generation facility or on-site backup generation facility eligible for waived enforcement during the period in a notification submitted under Subsection (a) to:

(1) take commercially reasonable steps to operate environmental controls and minimize excess emissions during the period;

(2) maintain operational records during the period; and

(3) submit proper documentation of the facility's operational records to TCEQ, including certain information.

(d) Provides that TCEQ has the discretion to consider whether an exceedance of an emissions limit or standard during a period for which a notification is submitted under Subsection (a) is appropriate as the basis for an enforcement action against the owner or operator of an electric generation facility or on-site backup generation facility based on information available to TCEQ, including information contained in the documentation required by Subsection (c)(3).

(e) Requires the owner or operator of an electric generation facility or an on-site backup generation facility eligible for waived enforcement during the period in a notification submitted under Subsection (a) to report any exceedance of an emissions limit or standard in accordance with TCEQ regulations and permit requirements.

SECTION 2. Effective date: September 1, 2025.