Hundreds of laws pertaining to the gas and electric utility matters, the energy market and ERCOT were adopted by the Texas Legislature in 2023 and 2025. It’s now up to regulators to implement them.
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During this year’s regular session of the Texas Legislature, lawmakers filed more than 250 bills relating to electric utility and ERCOT matters overseen by the Texas Public Utility Commission as well as a smaller number of bills relating to gas utility matters overseen by the Texas Railroad Commission. Not all those bills passed, but those that did are subject to rule-making efforts at both agencies. Below we summarize developments pertaining to some of that rule making from this year’s 89th Texas Legislature, as well as some left-over rule making from the 88th Texas Legislature in 2023.
At the Public Utility Commission
- House Bill 145, 89th Texas Legislature. In early July, the PUC staff released questions for public comment on the design of rules implementing House Bill 145, which pertains to wildfire mitigation plans. The new rules will apply to all transmission and distribution-owning entities located in “wildfire risk areas.” The PUC approved a Proposal for Publication in late August (proposal link) and is expected to post a final rule later this fall, tentatively on November 6. (Project No. 56789).
- House Bill 1500, 88th Texas Legislature. A requirement was included in House Bill 1500 — that is, the PUC and ERCOT Sunset bill from 2023 — that requires renewable resources interconnected after January 1, 2027 to be available during certain high risk and emergency intervals. The PUC approved a Proposal for Publication (link) on July 31, but since receiving comments to this proposal in early September, there has been no further discussion by the PUC on this rule. Expect a final rule to be posted later this fall, tentatively on Dec. 12. (Project No. 58198).
- Senate Bill 6 (Large Loads), 89th Texas Legislature. Under Section 4 of Senate Bill 6, large loads (75 MW or greater) co-locating behind the meter with new generation resources must file a net metering plan with ERCOT. ERCOT has 120 days to review the plan, and the PUC review can extend to no more than 180 total days. The PUC adopted a Proposal for Publication in this matter on September 18, and public comments were due on October 17. (Project No. 58479).
- SB 6 (Peak Demand Forecasts), 89th Texas Legislature. Section 2 of SB 6 calls for the establishment of criteria for ERCOT to forecast peak demand of large loads. ERCOT’s forecast will be used in transmission planning and in resource adequacy evaluations. ERCOT testified early in the legislative session on the adjustments it is making to the load forecast, significantly reducing the claimed capacity of large loads seeking interconnection. The PUC adopted a Proposal for Publication in this matter on September 18, and public comments were due Oct. 17. This rule should be in place for the 2026 planning cycle. (Project No, 58480.)
- SB 6 (4CP), 89th Texas Legislature. Another section of SB 6 requires that the PUC to reevaluate the 4 Coincident Peak (4CP) method of transmission cost allocation. This is important because any changes to the 4CP methodology could result in significant shifts in transmission cost responsibility among all classes of market participants. Commission staff on Aug. 5 released a memo requesting public comment on a set of questions about assignment of transmission costs, with responses due Sept. 9. While most respondents recognized the need to modify the 4CP, there is little agreement about the method the PUC should adopt. (Project No. 58484.)
- SB 231, 89th Texas Legislature. This legislation reforms pre-existing law relating to Temporary Emergency Electric Energy Facilities. A Proposal for Adoption is expected on Dec. 18. (Project No. 58392.)
- SB 1789, 89th Texas Legislature. This legislation relates to transmission and distribution pole standards. A Proposal for Publication is expected on Dec. 12. No docket number has been assigned to this matter.
At the Texas Railroad Commission
- HB 4384, 89th Texas Legislature. House Bill 4384 allows gas utilities to deploy a special regulatory mechanism to quickly hike rates for some of their infrastructure and tax expenditures. Such rate adjustments would take effect in advance of any review in a general rate proceeding, although ratepayers would be entitled to refunds (with interest) if expenditures were later found to have been incurred imprudently. The Railroad Commission published a new rule §7.7102 to implement HB 4384 on Oct. 17 and parties can submit comments on it thorough Nov. 17. For more information, see the Proposed Rules page at this link: http://www.rrc.texas.gov/general-counsel/rules/proposed-rules/