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Updated: Substitute Language For Broad Texas Energy Bill Released, Confirms Elimination Of Prior Variable Rate Plan (Narrowed To Wholesale Index Plans)
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Committee substitute language for Texas bill SB 3, which as reported yesterday was reported out favorably, has been released
The language confirms that, as previously reported, the committee substitute drops completely a provision in the original bill which would have banned all variable retail electric rates, and limited retail electric providers to serving customers under fixed rates, for all customer classes.
Instead, the SB 3 would ban wholesale indexed products for both residential and small commercial customers.
The bill does not define the term small commercial customer, and there is no broadly applicable definition for small commercial customer in PURA (the bill would add a new section of PURA which is not nested under any existing section with a section-specific definition for small commercial customer). The longstanding 50 kW delineation for small commercial customers in Texas is currently established in PUC rule.
SB 3 specifically provides that a retail electric provider may not offer a wholesale
indexed product to a residential or small commercial customer, with "wholesale indexed product" meaning, "a retail
electric product in which the price a customer pays for electricity
includes a direct pass-through of real-time settlement point prices
determined by the independent organization certified under Section
39.151 for the ERCOT power region."
SB 3 provides that REPs and TDUs shall work to provide certain information to customers, as follows:
An electric utility providing electric delivery
service for a retail electric provider, as defined by Section
31.002, shall collaborate with the retail electric provider and the
commission to ensure that information about the following matters
is periodically provided to the retail electric provider's retail
customers together with bills sent to the customers:
(1) the electric utility's procedures for implementing
involuntary load shedding initiated by the independent
organization certified for the ERCOT power region;
(2) the types of customers who may be considered
critical care residential customers or critical load according to
commission rules adopted under Section 38.075;
(3) the procedure for a customer to apply to be
considered a critical care residential customer or critical load
according to commission rules adopted under Section 38.075; and
(4) reducing electricity use at times when involuntary
load shedding events may be implemented.
Furthermore, the bill requires that the PUC shall require each retail
electric provider to:
(1) provide to the provider's customers clear and
understandable information about the requirements for voluntary
load shedding participation before the provider accepts a
customer's agreement to volunteer to participate in voluntary load
shedding;
(2) inform the provider's transmission and
distribution utilities whether the retail electric provider serves
customers willing to voluntarily participate in load shedding
during an energy emergency; and
(3) coordinate with the provider's transmission and
distribution utilities regarding the potential total amounts of
electricity that would be available if voluntary load shedding is
needed.
Additionally, the bill would require retail electric providers to develop emergency operations
plans that are subject to review by the PUC. Under the bill, the PUC shall require a REP to file an updated
emergency operations plan if the PUC finds that an emergency operations
plan on file does not contain adequate information to determine
whether the REP can provide adequate
electric services.
SB 3 would adopt a new definition of "critical care residential customer", which means, "a
residential customer who has permanently residing in the customer's
home a person who has been diagnosed by a physician as being
dependent upon an electric-powered medical device to sustain life."
ERCOT Offer Cap Changes
SB 3 would require the PUC to establish an emergency system-wide
offer cap program in ERCOT, "based on actual costs of generation at the time of
the emergency for the wholesale electric market," with such offer caps to be in place during emergencies
If such program includes more than one emergency
system-wide offer cap:
(1) the program may not authorize the high system-wide
offer cap to be in effect for a continuous period of more than 12
hours;
(2) the program may only allow for a low system-wide
offer cap that cannot exceed the high system-wide offer cap;
(3) the program may not allow an emergency system-wide
offer cap to exceed any nonemergency high system-wide offer cap;
and
(4) the price of ancillary services may not exceed 150
percent of the high system-wide offer cap.
Other provisions
SB 3 would require that the PUC shall ensure that
the independent organization certified under Section 39.151 for the
ERCOT power region procures ancillary services sufficient to manage
any reliability impacts of intermittent generation resources,
including variability across peak demand periods, and shall
directly assign the costs of such services to intermittent
generators consistent with cost-causation principles.
The bill provides that the PUC by rule shall require each provider of
electric generation service to
implement measures to prepare the provider's generation assets to
provide adequate electric generation service during a weather
emergency according to reliability standards adopted by the
commission.
The bill includes weatherization requirements for certain gas facilities as well
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Term 'Small Commercial Customer' Not Defined; Bill Prohibits Wholesale Index Plans To Such Customers
Language Released On Bill's Proposal For Changes To ERCOT Energy, A/S Price Caps
Imposes Various New Requirements On Retail Providers
March 26, 2021
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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