Texas Bill Filed To Terminate General Land Office's Authority To Sell Retail Electricity (State Power Program)

HB 1128 has been filed in the Texas House of Representatives which would terminate the authority for the Texas General Land Office to sell retail electricity, which it currently does through a contracted retail electric provider

HB 1128 provides that the GLO's authority to sell or convey power would expire September 1, 2022.

Under the bill, the General Land Office or an entity operating under a contract with the General Land Office could continue to provide retail electric service, under the terms of an agreement with a customer entered into before the effective date of the bill, only until the date the agreement expires. Under the bill, the General Land Office may not renew or extend the expiration or termination date of a contract to provide retail electric service in accordance with Subchapter D, Chapter 35, Utilities Code, to a date after September 1, 2022.

The bill would not affect the General Land Office's authority to sell or convey natural gas

HB 1128 is authored by Rep. Travis Clardy

Currently, the Texas General Land Office (GLO) is authorized by PURA to sell electricity to, "public retail customers that are military installations of the United States, agencies of this state, institutions of higher education, or public school districts." Surplus power, "may be sold to public retail customers that are political subdivisions of [Texas] or to a United States Department of Veterans Affairs facility." This program is known as the State Power Program.

Because the GLO does not own electric generation facilities, it contracts with a retail electric provider (REP) to leverage the GLO’s natural gas holdings into electricity, which is sold to the eligible customers listed above. The current REP administering the State Power Program is Cavallo Energy Texas, a subsidiary of Calpine Corporation.

Because the State Power Program is administered by the GLO, it is not subject to the Public Utility Commission tax assessment, nor is it subject to the Gross Receipts Tax, imposed under Chapter 192 of the Tax Code. This represents a 2% reduction in overhead from the GLO administered program