SENATE APPROVES MAJOR ELECTRIC RELIABILITY PACKAGE

(AUSTIN) — The Senate on Wednesday approved a package of bills intended to increase the state's electrical generation capacity and create an energy insurance plan to avoid a state-wide blackout like the one that struck the state in February of 2021. Winter Storm Uri knocked out power for millions of Texans for days in part because the state lost too much of its generation capacity as the storm rolled through in the wee hours of Valentine's day, knocking power plants offline across the state. The Legislature spent many hours last session trying to address the acute problems that led to the issue, including weatherization, planning, and communication, but too many Texans worry about the reliability of the state's energy grid, said Georgetown Senator and Business and Commerce Committee chair Charles Schwertner. "The bottom line is, we as a state need dispatchable generation and Texans need surety in their grid," he said. The Senate's focus this session has been on building a more reliable electric grid with the capacity to meet the state's energy needs both today and in the future.

As chair of the Senate Business and Commerce Committee, Georgetown Senator Charles Schwertner has led the chamber's efforts to improve electric capacity and reliability this session.

The most tangible component comes in SB 6, by Schwertner, which would create the Texas Energy Insurance program, aimed at incentivizing the construction of 10,000 megawatts of new natural-gas fired generation - enough to power more than 2 million Texas homes - to be sited strategically around the state. Schwertner said this new capacity won't interfere with the state's deregulated energy market because these "insurance assets" would stand idle until grid conditions are at their tightest and ERCOT, the independent organization that manages the state grid, is facing a load shed situation. Rather than resorting to rolling blackouts, ERCOT would order that these plants are brought online. Once the grid was stabilized, those plants would be the first to go offline. "I am convinced that if we had this fully in place, fully implemented, prior to Uri, peoples' power would not have gone off," said Galveston Senator Mayes Middleton, who spoke in support of the bill. The measure would also seek to maintain the state's current generation fleet by creating a new, zero-interest loan program backed by the state, to help generators maintain existing plants.

The Senate approved another bill, SB 7, also by Schwertner, that would shift more of the burden of backup services intended to preserve reliability to renewable, intermittent generators and away from thermal, dispatchable sources. "Reliability comes at a cost, and for too long that cost has not been shared equally between intermittent and firm generation," said Schwertner. "This bill brings balance to the market." Generators would be evaluated by the Public Utility Commission for reliability, and less reliable generators - typically wind and solar - would be required to purchase additional dispatchable capacity from the state energy market. The bill also creates a new non-emergency backup service called the Dispatchable Reliability Reserve Service, comprised of generators that can come on line within two hours and can run for at least four hours that ERCOT can call on when grid conditions tighten.

New generation capacity has been a priority of Senate leadership this session, with Lt. Governor Dan Patrick saying that the state must find a way to build additional generation capacity before session ends on Memorial Day. He praised the Senate for its bipartisan support for the package, and noted while every member didn't support every bill, there wasn't a significant gulf between the yes and no votes. "I think everyone who is a no vote is very close to a yes vote, with the state sitting on billions of dollars of surplus I think they would say to us "you left money on the table" if we didn't add power, I think the public would have a question about that," said Patrick. "I know it's a work in progress but great work on this and members thank you for all of your work." The bills will now go to the House for further consideration.

The Senate will reconvene Thursday, April 6 at 8 a.m.

###