Lege Update: D-Day and A Powering Texas Forward Debacle

Lt. Gov. Dan Patrick announcing his energy plan - Mar 11, 2023

By Cyrus Reed

Yesterday was the last day that Senators and Representatives can file their bills in the Texas Legislature. All told, over 5,300 House bills, plus several hundred resolutions, and some 2,600 Senate bills, and several hundred resolutions have been filed. That’s nearly 9,000 pieces of legislation. We haven’t read ‘em all yet. 

Most of them won’t pass - in fact, more than half will never get a hearing - but all of them have at least a slight chance of passing. Let’s talk about a few of these bills as they relate to our legislative agenda.

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“Powering Texas Forward”…  on the backs of ratepayers!

As I stood in a corner in the small press room outside the chambers of the Senate waiting for Lt. Governor Dan Patrick, Dr. Charles Schwertner, the Chair of the Senate Committee on Business and Commerce, and a number of senators from his committee, to announce their plan to the press to keep the lights on in Texas, I wondered which of the ideas put forward mainly by fossil fuel interests they would roll out. It turns out all of them, and none of the people-centered solutions favored by the Sierra Club. 

Would it be the one favored by the Public Utility Commission and heavily supported by the state’s top generation interests like NRG, Vistra, Exelon, and Calpine? They wonkily-named Performance Credit Mechanism? Yep, it’s in SB 2012, but that was just one of the nine bills laid out in the press conference. 

Would it be the approach pushed by Berkshire Hathaway to build up to 10,000 megawatts of polluting power plants near population centers, paid for by you and me with no risk for the developer? Yep, that too! iIt’s in SB 6. 

Would it be the preferred approach of the oil and gas industry, the Texas Chemical Council, and the Texas Association of Manufacturers - an extra resiliency service (which actually might be an OK idea) and state financing through low-interest loans of "dispatchable" generation? Yep, it’s in SB 6 and SB 7. 

Would it be the anti-renewable approach favored by right-wing ideologues and the fossil-fuel funded Texas Public Policy Foundation, which includes requiring “firming” of renewable energy generation, making generators pay for part of the cost of transmission, and making renewables pay for part of the cost of ancillary services? Yep, it’s in both SB 7 and SB 1012. 

And to round it all out, a couple of extra anti-renewable bills - one that eliminates Renewable Energy Credits (a successful market-based approach to help customers choose renewable energy) and one that REQUIRES new investment in generation in to be no more than 50% renewable energy - effectively stopping Texans from enjoying the benefits of renewable energy.

With the exception of SB 2010 (Schwertner), which would create an annual report by the market monitor of potential manipulation of the wholesale electric market, and SB 2011 (Schwertner), which would increase maximum penalties for certain market power and other abuses to $1,000,000, and also makes some changes to voluntary mitigation plans, the Sierra Club is strongly opposed to these bills and will fight them. But speaking honestly, in the Senate it is virtually impossible to stop bills that have the blessing of the Lt. Governor, and these nine bills do. 

We are most concerned by SB 6, SB 2012, SB 1287, SB 2014, and SB 2015 and will work to make sure these bills get stuck in the House of Representatives given the likelihood they will pass the Senate. 

It’s important to note that there are many similar bills filed in the Texas House which we are also concerned about including some by Chair Todd Hunter, who runs the Committee on State Affairs. 

There’s a better set of solutions. Will the Legislature pick them up?

The legislature should focus on bills that actually help energy customers save money on bills, and lower peak and electric demand, while also encouraging local generation solutions like distributed generation. To build support, we are encouraging our members and supporters to take action here and tell the Speaker and Lt Governor that we want bills that help people not pad corporate profits. So here are some bills we are actively supporting and working closely with the authors and other organizations. 

Making transmission work for Texans

SB 31 (Zaffirini) Relating to the interconnection of the ERCOT power grid to grids outside the ERCOT power region. This bill encourages transmission providers to be able to interconnect with other regions in a way that does not subject Texas to federal regulation, maintaining our independence. 

HB 1254 (Darby) Relating to certificates of public convenience and necessity for certain transmission projects. This bill helps jumpstart the build out of transmission and reduce the congestion on the grid.

Raising energy efficiency and demand response goals 

SB 114 (Menendez) Relating to the provision of electricity service in the ERCOT power region. This bill requires retail electric providers to offer programs to help reduce peak energy use in the summer and winter.

SB 258 (Eckhardt) Relating to energy efficiency goals for electric utilities. This bill raises the energy efficiency goal of private utilities to one percent of sales. 

HB 4784 (Anchia). Relating to the provision of electricity service in ERCOT. This bill raises the energy efficiency goals to one percent by 2027 at private utilities and requires retail electric providers to offer programs to reduce peak energy use in the summer and winter. In some sense, it is a combination of SB 114 and SB 258. 

Coordinating energy efficiency measures at multiple state agencies and utilities 

HB 4811 (Anchia) and SB 2404 (Schwertner) Relating to the creation of the Texas Energy Efficiency Council to foster collaboration, coordination, and communication to enhance the state's energy efficiency performance. 

Taking advantage of federal funding

SB 238  (Menendez) Relating to the installment of electric school buses and solar panels in Texas public schools. This bill directs the State Energy Conservation Office to work with school districts to obtain federal funding to make buildings more efficient, add solar and obtain electric school buses. 

HB 2502 (Reynolds) Relating to the creation of an energy efficiency loan guarantee program. This bill directs SECO to seek federal funding to create a revolving loan program for energy efficiency and measure any energy savings and pollution reductions that result. 

HB 3061 (Zwiener) This bill directs SECO to seek federal funding for a variety of energy efficiency programs and measure any energy savings and pollution reductions that result. 

Continuing the PUCT and making improvements 

HB 1500 (Holland)and SB 1368 (Schwertner) Relating to the continuation and functions of the PUCT and the Office of Public Utility Counsel, and the functions of the independent organization certified for the ERCOT power region. This bill continues the agency, but improves transparency and public participation.

Making distributed generation work for us

HB 3010 (Zwiener) Relating to the use of and permitting for certain energy devices at a retail customer's premises. This bill encourages cities to provide faster permitting of solar energy and storage devices at peoples’ homes and businesses.

HB 3387 (Hunter) and SB 1699 (Johnson) Relating to the participation of aggregated distributed energy resources in the ERCOT market. Makes it clear that small distributed generation like solar and storage can be aggregated and participate in the market. 

HB 3239 (Hernandez) Relating to the participation of distributed energy resources in the ERCOT ancillary services and wholesale energy markets. Similar to the Hunter-Johnson bill, but creates additional timelines and customer protections to make sure customers can participate more easily in ERCOT’s markets. 

Advancing advanced building codes 

HB 3312 (Hernandez) and SB 2453 (Menendez) Relating to certain regulations adopted by governmental entities for the building products, materials, or methods used in the construction of residential or commercial buildings. This bill allows SECO to move forward on adoption of the 2021 energy codes to assure that new construction is more energy efficient. 

Providing relief for customers from high bills 

HB 3078 (Hernandez) Relating to a program to provide assistance for certain retail electric customers. This program directs the PUCT to create a voluntary payment assistance and weatherization program for low-income customers who meet certain threshold requirements. 

SB 1501 (Huffman)/ HB 4099 (Bonnen) Relating to the payment of gas customer rate relief charges imposed for costs related to Winter Storm Uri. Provides relief to gas customers from high bills caused by Winter Storm Uri. 

What else happened this week? 

This week, the drama over Fairfield Park was in the news, as Vistra Corp, the largest energy generator in Texas, continued to insist to multiple committees that it has a private contract to sell the land (on which the state park sits) with a private developer, including future water rights, which would decimate a lake famous for its bass fishing and recreation for thousands of Texas families. In response, the Legislature added $100 million in acquisition funds to the “supplemental appropriations” bill, filed by Sen. Joan Huffman as SB 30. That amount is more or less what Vistra is supposedly selling the park for to the private developers so hopefully the extra money will bring them to the table. Sierra Club testified in support of the bill which also includes Winter Storm Uri relief and extra funding for flood infrastructure. 

But not to be outdone, the legislature seems to have finally recognized that it needs to actually put some money into the future acquisition of parks beyond this one-time funding, and three different representatives filed bills to set aside money for future park and other land acquisition for the public good. Sierra Club is supportive of all these important bills and will be seeing which ones make their way through the process. 

For example, HB 4177 by Rep. Walle would create a $1 billion fund for new parks, while HB 3801 by Rep. Ken King and SB 1648 by Sen. Parker would create the Centennial Fund for new parks along with a constitutional amendment to dedicate funding for new park acquisition. Finally, HB 3165 by Holland (and HJR 138) would create the Water and Land Conservation Fund to dedicate 4% of oil and gas severance taxes for future land, water, and conservation easements. 

With Fairfield Park dominating the news, now may finally be the year the Texas Legislature steps into provides adequate funding for future park development. 

Finally, the budget discussions on the new two-year budget also continued with committees in the House and Senate busily marking those bills up (SB 1 and HB 1). And we were busy making last minute pitches to the committees. We expect the House Committee on Appropriations to vote on a final budget bill for consideration on the House floor within two weeks. The budget must first pass the House before being taken up by the Senate, which will ignore the House version and substitute their own!