By Ethan Miller
TXSES Intern

With the gaveling of Sine Die on May 29 for the 88th Texas Legislative Session, Texas successfully avoided the passage of catastrophic anti-renewable bills like SB 7 and SB 624. However, several bills, including those that would further subsidize the already taxpayer-laden fossil fuel industry have made their way to Governor Abbott’s desk. Here’s a brief overview of some of the more pertinent bills.

TXSES’ Wins in the Legislature:

  • Passed: SB 1699 (Johnson), permits aggregated distributed energy resources to participate in the ERCOT wholesale market without having to register with the PUCT as a power generation company. Additionally, the bill permits utility providers to offer and promote demand-response programs when possible and allows them to make use of grant funding for up to 10% of the costs. Demand response, as a concept, seeks to increase grid reliability by reducing energy consumption during times of peak demand through smart-metering technologies and increased energy efficiencies.  Sent to Governor Abbott on May 29.
  • Passed: HB 3526 (Raymond), will forbid municipal or county governments from applying building codes to the construction of solar pergolas (patios with solar panels affixed). The bill was sent to Governor Abbott on May 18.
  • Killed: HB 4455 (DeAyala), would have increased the ability of homeowner’s associations (HOA) to restrict the location of rooftop solar. Specifically, under current law, if the homeowner can prove that an alternate location outside of the HOA-designated area would result in 10% more electrical generation, the homeowner may use the alternate location. HB 4455 would have raised that bar from 10% to 25%, a more difficult hurdle for solar homeowners. Fortunately, the bill died, having failed to make it out of the House Business & Industry Committee.
  • Killed: SB 7 (Schwertner|King), would have mandated electric utility providers to pay exorbitant fees to generators during unreliable grid conditions. Additionally, the bill offered little regulatory oversight and would incentivize new dispatchable generation facilities. Expert estimates had pinned the cost of SB 7 from $10-$18 billion; however, legislators capped the cost to $1 billion annually. Large generators indicated this was not enough for them to build new facilities.
  • Killed: SB 624 (Kolkhorst|Middleton), would have imposed excessively stringent permitting processes on renewable energy generators and levied new application fees. Fossil fuel and nuclear plants were exempt from this permitting process. Additionally, non-dispatchable generators (aka renewables) would be required to pay more costly service fees than they currently pay. In sum, the bill required renewables to bankroll further development of fossil fuels.

TXSES’ Losses in the Legislature:

  • Passed: HB 5 (Hunter|Meyer|Burrows|Shine|Longoria), will replace Chapter 313, a recently expired program that helped oil and gas companies, chip manufacturers and other industries secure billions in tax abatements through local school districts. HB 5 also makes methane gas power plants cited in SB 2627 eligible for tax abatements. While the bill was scaled back from its predecessor and includes more oversight, it still excludes clean energy generators and battery storage facilities from receiving the benefits. HB 5 was sent to Governor Abbott on May 30.
  • Passed: SB 505 (Nichols) will require electric vehicle (EV) owners to pay a $400 registration fee for new first-time EVs, and a $200 annual registration fee each year after. Some purport that the bill is designed to make up lost revenues from gas taxes; however, the bill will punish rather than reward EV’s economically beneficial carbon reductions. EV advocates proposed a mileage system in addition to a lower registration fee. The bill was signed by Governor Abbott on May 13 and will become effective September 1, 2023
  • Passed: HB 2127 (Burrows|Meyer|Goldman|King, Ken|Raymond), will claw back the power of home rule cities dramatically. Should cities draft or pass any law that pertains to any of the contents of the Texas Agriculture Code, Civil Practice and Remedies Code, Business & Commerce Code, Finance Code, Insurance Code, Labor Code, Local Government Code, Natural Resources Code, Occupations Code, or Property Code, the law will be considered null. This will dramatically reduce the ability of cities to incentivize the adoption of renewables and disincentivize the continued use of fossil fuel generation. HB 2127 was sent to Governor Abbott on May 24.
  • Passed: SB 2627 (Schwertner), will establish a special fund for dispatchable (non-renewable) generators to receive 2% interest loans for up to 60% of the cost of developing new facilities. While the bill will not go into effect without the enabling legislation SJR 93, it will still withhold taxpayer dollars and provide up to 20% of costs in the form of bonuses. All the while generators have admitted that the extra financing is not necessary. SB 2627 was sent to Governor Abbott on May 29.
  • SJR 93, the enabling legislation for SB 2627, proposes a constitutional amendment to create the State Energy Fund Amendment and authorizes other funding mechanisms for the construction, maintenance, modernization and operation of electric generating facilities. It was filed with the Secretary of State on May 30 and will be on the general election ballot statewide on November 7, 2023.
  • Passed: SB 1290 (Perry) will direct the Texas Department of Agriculture and Texas A&M Agrilife + Forest Service to study the effects of the operation of, and the impacts of the disposal of solar, wind, and energy storage equipment. The bill was sent to Governor Abbott on May 29.
  • Killed: HB 3010 (Zwiener), would have streamlined the municipal permitting process for solar installations significantly. The bill would have required cities to use the National Renewable Energy Laboratory’s SolarAPP+ program to expedite permitting and reduce costly wait times. Despite maneuvering and attempting to add the language as an amendment to other bills, HB 3010 did not make it out of House State Affairs Committee.
  • Killed: HB 4542 (Moody), would have required utility providers operating outside of ERCOT to institute a net-metering buyback program for homeowners with rooftop solar that produces excess generation. HB 4542 was placed on the intent calendar on May 24.

Indeterminate Impact

Passed: HB 1500 (Holland|Bell, Keith|Canales|Goldman|Clardy), the sunset bill for the Public Utility Commission (PUCT), was one of the more harrowing pieces of legislation in the 88th.  Under the Texas Sunset Act, all state agencies go through sunset review to determine if that agency is still necessary, or if some of the functions of the sunsetting agency should be moved to another agency in order to improve efficiency/effectiveness. While amendments are often added in sunset legislation, it’s considered bad practice. The bill was amended to include some provisions of SB 7, the so-called “performance credit mechanism,” and SB 624, a discriminatory permitting process for solar and wind projects only.

Included in HB 1500:

  • Caps the cost of the PCM at $1 billion. Renewables are excluded but battery storage should be able to participate.
  • Mandates the “firming” of renewables at the portfolio level by 2027; includes battery storage as an acceptable firming method. 
  • Mandates the PUCT to conduct a study of cost allocation of ancillary services by 2026.
  • Requires the PUCT to establish a reasonable allowance for transmission-owning utility costs associated with interconnection. 
  • Mandates the PUCT to implement a Dispatchable Reliability Reserve Service (DRRS) by the end of 2024.
  • Establishes a termination date for the Renewable Generation Requirement – known in other states as the Renewable Portfolio Standard (RPS) – on September 1st, 2025. 

HB 1500 was sent to Governor Abbott on May 30. 

  • Passed: SB 1015 (King), will amend the Texas Utilities Code to provide the Public Utility Commission of Texas (PUCT) with sole regulatory control over tariff/rate-making adjustments. Revisions replace the 60-day minimum with a 60-day maximum process and establish limits to the frequency with which electric utilities may request adjustments. The bill was sent to Governor Abbott on May 29.