BILL ANALYSIS

Senate Research Center	S.B. 2327
89R13089 JXC-F	By: Zaffirini
	Business & Commerce
	4/30/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Non-profit water supply corporations (WSCs) providing water and sewer services in rural areas do not have sufficient electric power available to properly operate or expand their water or sewer systems. Due to a lack of grid capacity, WSCs are having to establish power generation facilities to generate the capacity operate well pumps, treatment systems, and related infrastructure.

Design and construction of these power generation facilities can be cost prohibitive and increase the cost of water and sewer service to the customers. Although WSCs are authorized to self-generate electric power for their own needs, they are not currently authorized to perform generation for sale into the Electric Reliability Council of Texas �(ERCOT) grid. This prohibition prevents WSCs from applying for state funding through the Texas Energy Fund and from being qualified to be eligible for Completion Bonus Grants under that program.

S.B. 2327 would allow WSCs to provide sewer and water services at lower rates and help achieve electric grid reliability in rural areas of the state. What's more, by expressly authorizing water supply corporations to generate electric power they can issue bonds to build facilities to meet their power demands while providing dispatchable power to the ERCOT region.

As proposed, S.B. 2327 amends current law relating to the generation of electric power for sale by a water supply or sewer service corporation.

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 A, Chapter 67, Water Code, by adding Section 67.0115, as follows:

Sec. 67.0115. ELECTRIC GENERATION. (a) Authorizes a corporation operating in the Electric Reliability Council of Texas (ERCOT), as defined by Section 31.002 (Definitions), Utilities Code, to register as a power generation company under Section 39.351 (Registration of Power Generation Companies), Utilities Code.

(b) Authorizes a corporation registered as a power generation company to generate electric power for sale in the ERCOT power region to provide revenue for the corporation. Provides that the revenue that accrues from the sale of electric power is authorized to be used by the corporation only for the corporation's costs of producing and selling electric power, including administration, employees, equipment, fuel, and maintenance or a purpose described by Section 67.002 (Purpose of Corporation).

(c) Requires a corporation that generates electric power for sale to account for and use the revenue from those sales in a manner that complies with Section 67.004 (Application of Texas Non-Profit Corporation Act).

SECTION 2. Effective date: September 1, 2025.