Texas electricity grid one step closer to reform after House advances proposal

Texas Politics

AUSTIN (Nexstar) — The troubled electricity grid that took the spotlight during the fatal February freeze is one step closer to seeing changes from state lawmakers — with one week remaining in the legislative session.

The Texas House spent roughly four hours debating more than two-dozen changes to Senate Bill 3 over the weekend, formally passing the legislation Monday morning.

The plan to reform the grid tackles three main objectives “from wellhead to light switch,” according to State Rep. Chris Paddie, R-Marshall, who led the House effort.

“And that is oversight and accountability, communication failures, which we saw throughout the system, and weatherization — to ensure that these facilities, both utility and natural gas facilities are prepared for these extreme weather events and will be able to continue to function and do the job that they are supposed to do,” Marshall said.

SB 3 would require electricity providers operating on the grid managed by the Electric Reliability Council of Texas (ERCOT) to weatherize their equipment. The rules would be set by the Public Utility Commission six months after the law takes effect.

“Those would go a long way… to really making this situation go away,” Curt Morgan, chief executive officer for Vistra Corp., said. “And I don’t think the legislature can walk away in this session without fixing this.”

Morgan, whose company is the state’s largest electric provider, said the weatherization mandate should be a requirement for all parts of the energy system. He expressed concern about the section of the legislation that would force only parts of the natural gas industry to weatherize.

“We had a failure of the gas system that also the electric system contributed to as well, so it’s very important that those two systems work seamlessly together,” he noted.

The bill creates a state advisory committee to decide what aspects of the gas industry are essential to feeding power generators. The Railroad Commission would develop rules for the weatherization of gas wells and mapping out critical infrastructure in the gas industry.

Todd Staples, the former state agriculture commissioner who now serves as president of the Texas Oil & Gas Association signaled support for weatherizing only what is deemed critical to keep the system working, rather than spending money to weatherize all parts of the process.

“Our goal is to make that product available,” Staples said. “Make certain that consumers like power generation units that need that product, have access to that.”

“We have more than enough natural gas,” Staples explained. “We need to do the pre-planning, the pre-contracting, identifying the assets, and that’s where that mapping system comes into play.”

Morgan, who said his company lost approximately $1.6 billion during the storm and its aftermath, said the system only works if all groups in the industry are on the same page — particularly as it relates to winterization.

“I don’t think this is break the bank money,” he said about costs to weatherize, which he estimates are a few hundred million dollars across the energy sector.

“I don’t know how you can afford not to do it,” he added. “I mean, the state can’t see this happen again. You know, it’ll, it’ll slow the economic engine that we have, and of course, the disruption to people’s lives is unacceptable.”

SB 3 would also create a statewide power outage alert system. The legislation includes a provision requiring the Texas Division of Emergency Management to post on its website a list of essential supplies needed during various disaster scenarios to help Texans prepare for emergency situations.

After the 142-1 vote Monday, Texas House Speaker Dade Phelan, R-Beaumont, issued a statement praising the lawmakers involved in crafting the omnibus bill and called it “one of the most consequential pieces of legislation the state has tackled in recent memory.”

“This legislation will better ensure the reliability of our electricity market and make our grid more resilient in the face of extreme weather emergencies, and I applaud the House for their vital efforts to that end,” Phelan said.

The only House member to vote no was State Rep. Jeff Cason, R-Bedford.

The legislation was sent back to the Senate where the chamber will either agree on the House changes, or key lawmakers from each chamber will iron out the differences behind the scenes.

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