Senate advances energy bills to improve grid reliability, create level playing field | Texas

(The Center Square) – The Texas Senate has advanced five bills as part of its overall energy package designed to strengthen the state’s grid, protect it from cyberattacks, end some subsidies, and reduce costs for consumers.

The measures were filed by Sens. Jeff Schwertner, R-Georgetown, and Phil King, R-Weatherford.

They seek expand on reforms passed in the 2021 legislative session to address regulatory and power failures associated with Winter Storm Uri in February 2021.

Last session, reforms included overhauling the regulatory bodies responsible for overseeing the grid and Texas energy companies, requiring improved communication and internal operations, and implementing compliance measures to ensure winterization requirements for statewide critical energy infrastructure were met.

This session, the Senate has focused on developing market-based incentives to drive construction of new energy generation capacity in Texas, specifically “dispatchable” power from thermal generators like natural gas. Expanding natural gas generation is one of Lt. Gov. Dan Patrick’s legislative priorities.

“The balance between dispatchable and renewable or ‘intermittent’ power in Texas has been a major point of contention, with proponents of solar and wind touting the cost and environmental benefits of those sources,” the Senate said in a statement. “More in the Senate, however, believe that dispatchable power’s reliability is one of the most important factors for consideration in the state’s energy portfolio. They also argue that government subsidies have unbalanced the state’s deregulated energy market and have given an unfair advantage to renewable over dispatchable generation.”

SB 6 would create the Texas Energy Insurance Program and other funding mechanisms to support the construction and operation of dispatchable energy generating facilities. SB 6 “guarantees ‘steel in the ground’ to serve as the state’s energy insurance policy,” according to the bill analysis. It also would provide low-interest loans for existing dispatchable generators to access capital needed to maintain and make necessary improvements to existing generation resources. It would amend the state utilities code to include prohibitions on municipalities and requirements of the Public Utility Commission, among other measures.

SB 7 addresses market uncertainty and would increase grid reliability by targeting investment in dispatchable assets. The Texas electricity market “is distorted due to federal subsidies targeted at less reliable generators, which gives them an unfair market advantage over reliable generators. While these subsidies generally lower prices, they also contribute to a less reliable grid,” the bill analysis states. The bill would amend the state utilities code and implement multiple new requirements for the PUC to implement.

The bills are expected to pass the full Senate and be sent to the House.

Three energy bills filed by Schwertner and King already passed their respective committees and the full Senate.

SB 2013 would amend the Business & Commerce code to enhance electric grid security measures to protect it from cyber-attacks and attacks by “hostile foreign powers.”

“Currently, all critical grid equipment is not prohibited from having an external connection,” the bill analysis explains. “This creates an environment in which there could be connections to hostile country-controlled businesses and unsecured communications. Inverters, converters, and similar sensitive equipment are often manufactured in hostile countries by companies with known connections to hostile intelligence services and are maintained remotely by hostile nation companies or their subsidiaries. Protective relays at substations are also vulnerable to remote manipulation which could cause a cascading grid failure. Additionally, there is no requirement for background checks for sensitive positions at ERCOT.” The bill would implement a range of requirements to address these vulnerabilities and improve security.

SB 2014 would end a mandatory renewable energy subsidy and create a more level playing field between renewable generating technologies and dispatchable generating facilities. The Texas legislature created a renewable energy mandate and subsidy in 1999, which the lawmakers argue is no longer needed, because “renewable generation is now an established technology, and these statutory requirements are contributing to the market distortions caused by excessive renewable generation in ERCOT.” The mandate and subsidies were never intended to be permanent, and the bill would amend the mandate and end the subsidy.

SB 2015 would update a law the legislature passed in the 76th legislative session that set renewable energy goals and created an energy credit program. Due to a number of factors, the lawmakers argue the credit is no longer needed. “Conversely, the state is seeking to incentivize additional dispatchable generation, including but not limited on natural gas generation,” the bill analysis explains. The bill would update the previous law by requiring “power generators, electric cooperatives and municipally owned utilities to ensure that at least 50% of their capacity comes from a reliable, dispatchable generating source.” This includes thermal generators, batteries, geothermal, hydrothermal, and any future technology that is “switch-ready” and can come online in response to demand.

The new law would reverse an imbalance created by “federal mandates, investing trends, and other economic factors between intermittent/renewable generation and dispatchable generation,” according to the bill analysis.

SB 2013 and SB 2014 have been received in the House; SB 2015 hasn’t yet been received.

This article First appeared in the center square

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