Revised Substitute Texas Senate Bill Concerning REP Market Share Reported Favorably; Includes "Protections" Against Gentailers In Any PCM Market

The Texas Senate Committee on Business & Commerce has reported favorably a revised committee substitute for SB 2012

Text of the revised committee substitute was not immediately available

As described by Senator Charles Schwertner during a committee meeting, the version of SB 2012 that was reported favorably does not include the original 20% market share cap on retail electric providers which had been included in the original bill.

Schwertner said that the revised committee substitute includes the reporting requirement concerning REP market share. The original bill had provided that, "Each retail electric provider that offers electricity for sale shall report to the commission its annual retail sales in this state, the annual retail sales in this state by the provider's corporate parent, and any other information the commission requires to assess compliance with Subsection."

Schwertner said that the revised committee substitute clarifies and adds more protections to the Performance Credit Market (PCM) protections that had been included in earlier versions of the bill

Notably, Schwertner described one such PCM protection as, "preventing costs from being assigned in a way that unfairly benefits companies that own both generation and retail."

Schwertner further said that a PCM protection in the revised committee substitute is, "preventing generators receiving [PCM] credits from working only with retailers that they own [sic]." Since generators cannot own REPs, EnergyChoiceMatters believes the bill language will reflect this general provision applying to corporate parents or affiliates, though, as noted, the actual text of the revised committee substitute was not yet available

Concerning other aspects of the bill, Schwertner said that language requiring that the PUC "seasonally" procure A/S, which had been intended as PCM protection, has been removed, as such language could have affected all A/S which was not the intent

Concerning the ability of TDUs to build up to 5,000 MW of backstop generation under a safety net provision in the bill, Schwertner said that the revised committee substitute includes several changes.

Among other things, such "safety net", originally envisioned as up to 5,000 MW, may only be used if the PCM fails to attract an established amount of new dispatchable capacity (if unchanged from the original bill, 5,000 MW) within four years of PCM implementation. Notably, the bill does not mandate PCM implementation. Originally, the TDU safety net generation would have been tied to the amount of generation built between June 1, 2023, and December 31, 2026, rather than being tied to four years after PCM implementation.

Additionally, under the revised committee substitute, the safety net program would build new generation via a competitive RFP open to TDUs, generators, MOUs, and co-ops, rather than only TDUs