Wednesday, 31 March 2021 20:07

Sweeping Legislation to Overhaul Texas Electricity Market Heads to State House after Senate's Unanimous Approval

Written by Shawn Mulcahy and Erin Douglas, The Texas Tribune


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The Texas Senate on March 29 unanimously approved a sweeping bill that would overhaul the state’s electricity industry and infrastructure, including mandating that power plants prepare for extreme weather and outlawing risky indexed retail electric plans.

Senate Bill 3, filed by Republican state Sen. Charles Schwertner of Georgetown, now heads to the Texas House where its prospects are uncertain. Members in the lower chamber were to take up a series of related, standalone bills on March 30.


“There were a multitude of failures,” Schwertner said from the Senate floor March 29, referring to the massive power outages during the deadly winter storm. “And we’re fixing the problems.”


SB 3 would require all power generators, transmission lines, natural gas facilities and pipelines to make upgrades for extreme weather---a process known as weatherization. Most power generators and gas facilities were not equipped to handle temperatures that dipped into single digits last month.


Natural gas regulators and industry groups have claimed that the majority of the problems that caused a shortage of natural gas during the storm---which worsened the problems for power plants---was caused by power outages, and suggested that winterization of the natural gas supply system was unnecessary.


The Senate bill reflects that concern, leaving it to the Texas Railroad Commission, the regulatory body that oversees the state’s oil and natural gas industry, to decide what upgrades natural gas fuel facilities would have to make.


The bill does not address funding to pay for the mandated upgrades. However, other pieces of legislation in the Texas House have been proposed with various funding mechanisms. Experts say the process of retrofitting the state’s power plants for winter could be difficult and costly, but not impossible, depending on the types of upgrades eventually mandated by regulators.


The bill would also ban indexed retail electric plans, whose rates fluctuate based on the cost of wholesale electricity. Customers in Texas who purchased indexed electric plans, like Griddy---which has since declared bankruptcy---saw astronomically high bills in the weeks following the storm due to a massive spike in wholesale electricity prices.


Senate Bill 3 would also create a statewide emergency alert system in the event of future blackouts and would create...

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