Friday, April 02, 2021 by: Arsenio Toledo
The Texas Senate has passed a bill requiring the winterization of all of the state’s electricity-generating infrastructure. The bill also promised to completely overhaul Texas’ electricity market. This bill was made to prevent the historic blackouts that swept through the state during the February cold snap from happening again.
Nearly half of Texas’ power-plant capacity went down when a winter storm froze equipment and cut off the supply of gas. The ensuing blackouts left more than four million homes and businesses without power for several days. More than 100 people died during the crisis, and in its aftermath state lawmakers scrambled to address some of the preventable issues that caused the catastrophe.
The measure passed by the Texas Senate will require the owners of transmission lines, natural gas facilities, pipelines and power generators in the state to protect their infrastructure against extreme weather conditions or face a penalty of up to $1 million a day. (Related: Texans have filed multiple lawsuits against ERCOT for failing to adequately respond to the cold snap.)
The bill also bans power companies from offering electricity plans that are tied to the state’s power market. This practice is what made energy providers infamous in the aftermath of the cold snap, as many consumers were suddenly presented with inordinate energy bills. Notably, some customers of power retailer Griddy received bills in the tens of thousands of dollars. The latter was forced to declare bankruptcy after the crisis.
The goal of the bill is to introduce some modest regulations in the state’s free electricity market. The bill will change the way that electricity is priced during emergency situations to protect consumers from the surging electric bills.
Finally, the bill will also force renewable energy sources to have backup plans in order to provide power during emergency situations by purchasing ancillary services – systems that will help keep renewable energy generators operating reliably.
Similar electricity market reform bills in Texas’ lower house
Two days after the Senate passed its reform bill, the Texas House of Representatives passed its own series of bills written in response to the aftermath of the February power crisis.
The bills that passed are House Bill (HB) 10, 11, 12, 13, 16 and 17.
HB 10 mandates that key members of the Public Utility Commission of Texas and its subsidiary, the Electric Reliability Council of Texas (ERCOT), be residents of the state. HB 11 will require power providers in the state to prepare equipment to deal with inclement weather during both the summer and winter months.
HB 12 establishes a statewide alert system. HB 13 creates the Texas Energy Disaster Reliability Council, which will oversee the electric grid during crisis situations.
HB 16 bans the sale of wholesale indexed products to residential customers, which is similar to what the state senate proposed. Finally, HB 17 bans local governments from prohibiting specific energy sources.
“I think this is a critical first step,” said Republican Rep. Chris Paddie, who authored half of the six bills passed by the House. As chair of the House State Affairs Committee, Paddie led the examination into the disastrous handling of the cold snap and its aftermath.
“The Texas House today took important first steps in passing critical, essential reforms in the aftermath of Winter Storm Uri,” said Republican Speaker of the House Dade Phelan in a statement. “The actions taken by the House will help restore confidence in our critical infrastructure after the catastrophic mismanagement of our electric grid last month.”
“The House’s legislative package will reform ERCOT, ensure the reliability of our grid in extreme weather conditions, defend ratepayers and improve coordination during times of crisis,” added Phelan.
The bills in the Senate and in the House have been approved by their respective houses. Both chambers will now need to reconcile the various pieces of legislation before approving everything and sending it to the desk of Gov. Greg Abbott for signing.
“As far as fixing ERCOT going forward, winterizing the grid, making sure we have capacity, I believe the House and Senate will come together on that,” said Republican State Sen. Bryan Hughes. “It’s moving fine. We have plenty of time – just enough time – to do that.”
“We will hash out the differences,” said Phelan. “There’s no pride in ownership between the two chambers. We just want to do what’s right for all Texans.”
Learn more about how Texas responded to the winter storm by reading the latest articles at GreaterTexan.com.