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Enrolled Version Of Texas Winter Weather Event Omnibus Bill Drops Provision Allowing Wholesale Index Plans To Continue, Bill Sent To Governor
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The Texas House and Senate have both passed a conference committee version of SB 3, and the bill has been enrolled and is being sent to the governor
SB 3 as enrolled does not address, at all, wholesale indexed products for residential and small commercial electricity customers. As previously reported, a House version of the bill would have allowed wholesale indexed products to continue, subject to a price cap and notice requirements
As such, barring a provision having been tucked into another bill, or the issue being addressed in special session, the recently passed HB 16, which has become law, will control, which bans wholesale indexed products for residential and small commercial electricity customers. See our story here on HB 16 being signed by the governor and becoming law
ERCOT Price Cap Circuit Breaker
Enrolled SB 3 provides that PUC by rule shall establish an emergency pricing program for
the wholesale electric market.
Under the enrolled bill, the emergency pricing program must take effect if the
high system-wide offer cap has been in effect for 12 hours in a
24-hour period after initially reaching the high system-wide offer
cap. The PUC by rule shall determine the criteria for the
emergency pricing program to cease.
Under enrolled SB 3, the emergency pricing program may not allow an emergency
pricing program cap to exceed any nonemergency high system-wide
offer cap.
Under the enrolled bill, the PUC by rule shall establish an ancillary
services cap to be in effect during the period an emergency pricing
program is in effect.
Under the enrolled SB 3, any wholesale pricing procedure that has a low
system-wide offer cap may not allow the low system-wide offer cap to
exceed the high system-wide offer cap.
Per the enrolled bill, the emergency pricing program must allow generators to
be reimbursed for reasonable, verifiable operating costs that
exceed the emergency cap.
REP Obligation To Inform Customers Of Critical Care, Load Shed Information
The enrolled SB 3 provides that an electric utility providing electric delivery
service for a retail electric provider shall provide to the retail electric provider, and the
retail electric provider shall periodically provide to the retail
electric provider's retail customers together with bills sent to
the customers, information about:
(1) the electric utility's procedures for implementing
involuntary load shedding initiated by the independent
organization certified under Section 39.151 for the ERCOT power
region;
(2) the types of customers who may be considered
critical care residential customers, critical load industrial
customers, or critical load according to commission rules adopted
under Section 38.076;
(3) the procedure for a customer to apply to be
considered a critical care residential customer, a critical load
industrial customer, or critical load according to commission rules
adopted under Section 38.076; and
(4) reducing electricity use at times when involuntary
load shedding events may be implemented.
Evaluation Of New Ancillary Services
Enrolled SB 3 requires that the PUC shall:
(1) review the type, volume, and cost of ancillary
services to determine whether those services will continue to meet
the needs of the electricity market in the ERCOT power region; and
(2) evaluate whether additional services are needed
for reliability in the ERCOT power region while providing adequate
incentives for dispatchable generation.
Enrolled SB 3 provides that the PUC shall require the independent
organization certified under Section 39.151 for the ERCOT power
region, "to modify the design, procurement, and cost allocation of
ancillary services for the region in a manner consistent with
cost-causation principles and on a nondiscriminatory basis."
Dispatchable Generation; Ancillary Services For Extreme Weather
Enrolled SB 3 provides that the PUC shall ensure that the independent
organization certified under Section 39.151 for the ERCOT power
region (the provisions below are hereafter referred to as Subsection (b)):
(1) establishes requirements to meet the reliability
needs of the power region;
(2) periodically, but at least annually, determines
the quantity and characteristics of ancillary or reliability
services necessary to ensure appropriate reliability during
extreme heat and extreme cold weather conditions and during times
of low non-dispatchable power production in the power region;
(3) procures ancillary or reliability services on a
competitive basis to ensure appropriate reliability during extreme
heat and extreme cold weather conditions and during times of low
non-dispatchable power production in the power region;
(4) develops appropriate qualification and
performance requirements for providing services under Subdivision
(3), including appropriate penalties for failure to provide the
services; and
(5) sizes the services procured under Subdivision (3)
to prevent prolonged rotating outages due to net load variability
in high demand and low supply scenarios.
Enrolled SB 3 provides that the PUC shall ensure that:
(1) resources that provide services under Subsection
(b) are dispatchable and able to meet continuous operating
requirements for the season in which the service is procured;
(2) winter resource capability qualifications for a
service described by Subsection (b) include on-site fuel storage,
dual fuel capability, or fuel supply arrangements to ensure winter
performance for several days; and
(3) summer resource capability qualifications for a
service described by Subsection (b) include facilities or
procedures to ensure operation under drought conditions.
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Adds New Circuit Breaker Provision To ERCOT Price Cap
Includes New REP Obligation; Also Addresses Ancillary Services
May 31, 2021
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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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