Category Archives: Wholesale

CSSB 83: Oppose Unnecessary, Redundant and Prescriptive Requirements Related to Electric Grid Security

 

Overview of CSSB 83 by Hall

CSSB 83 creates an Electromagnetic Threat Preparedness Task Force, comprised of 10 members, to implement programs to address electromagnetic pulse (EMP), geomagnetic disturbance (GMD) and cyber-attack threats to the electric grid.

  • The bill defines “energy critical infrastructure” to include electric generation and transmission & distribution facilities.
  • The task force would identify technical and electronic resources, implement an education program for owners and operators of critical infrastructure, evaluate emergency planning & response procedures and develop a threat recovery plan.
  • The task force would submit findings and recommendation to the governor and legislature by July 1, 2018.

The Governor could instruct an agency to take actions as necessary to implement the threat protection and recovery plan developed by the Electromagnetic Threat Preparedness Task Force.

It also establishes a politically appointed Electric Grid Security Advisory Committee to review the findings of the Electromagnetic Threat Preparedness Task Force and prepare a report of its findings to the Governor, Lt. Governor and Speaker of the House by September 1, 2018.

The bill requires each affected electric company to report vulnerabilities to the Texas Division of Emergency Management by December 31, 2018.

Costs would be recovered through regulatory procedures; for those costs ineligible for traditional cost recovery, the legislature could fund recovery through appropriations of general revenue of Texas.

AECT Concerns

In general, the legislation presupposes that electric companies are not focused on improving grid security and recovery.

  • Electric companies in Texas participate in lead roles at a national level to address the security of the electric grid.
  • National activities include the development of mandatory North American Electric Reliability Council (NERC) standards and close collaboration with the Federal Energy Regulatory Commission (FERC), the U.S. Department of Energy (DOE), the U.S. Department of Homeland security, the National Institute of Standards and Technology and numerous utility based forums.
  • The Electric Power Research Institute (EPRI) and DOE recently released the first phase of a three-year study on this issue, finding a limited thermal impact of an EMP detonation on electric transformers, suggesting the collapse of the electric grid due to an EMP causing widespread failure of transformers is unlikely. There are several more studies to be undertaken as part of the EPRI/DOE project.

GMD has been demonstrated through studies and recent events to be of little to no risk to the ERCOT grid.

The indiscriminate requirements of the bill would incur significant costs – perhaps in the billions of dollars – which would ultimately be borne by all customers, regardless of the mechanism for collecting costs.

 

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SB 736: Support Leveling the Playing Field for Electric Power Sales by Removing GLO Involvement

 

Overview of SB 736 by Hancock

  • The Texas General Land Office (GLO) sells natural gas and electricity on the competitive market to public entities through its State Power Program.
  • The program was authorized in 1999, as part of Senate Bill 7, which created the competitive retail electric market in ERCOT.
  • The State Power Program provides electricity to its customers through a third-party retail electric provider (REP).
  • SB 736 would eliminate the electricity sales portion of the State Power Program currently granted under Section 35.102 of the Utilities Code. GLO would continue to sell natural gas to public entities.

SB 736 Eliminates the Distortion of Direct Government Involvement in the Competitive Electric Market

  • SB 736 opens the process for all REPs to offer the competitive bids in the retail electric market.
  • Texas’ competitive electric market opened in 2002, and now has dozens of marketers that serve public entities, ensuring the free market brings competitive bids to these entities.
  • It assures taxpayer dollars are expended efficiently, thanks to the strength of Texas’ competitive electric market.

Click here to download a PDF of this issue paper

Staffers Ask: What does [______] mean?

 

“Staffers Ask” is an occasional feature where we attempt to answer burning questions from the Capitol on electricity issues. Got a question? Email info@aect.net

The business of producing, delivering and selling electricity is extraordinarily complex, with constant engineering and economic considerations that inform decisions by market participants.

As with any technical industry, ours is prone to an alphabet soup of acronyms and abbreviations. AECT has developed a glossary to help when learning about the issues that face electric businesses.

Download the glossary here, or scroll below to view it online.

For even more detail, visit ERCOT’s glossary here.

Continue reading

HB 1926: Support Fraser on the Senate Floor

 

HB 1926 by Kacal (Sp: Fraser) – Relating to the governance of certain municipal power agencies.

 

Proposal

  • HB 1926 requires all municipally-owned utilities, if building transmission outside of their traditional service territory, to seek a certificate of convenience & necessity (CCN) through the PUC and follow the same routing process as any other electric utility.
  • The bill also continues the Texas Municipal Power Agency (TMPA), a collective of municipally-owned utilities that includes Bryan, Denton, Garland and Greenville.

 

Discussion

  • AECT supports HB 1926, as the bill ensures a level playing field for all utilities building transmission in Texas.

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Click here to download a PDF of this issue paper.

 

SB 1122: Support Ensuring Texas Power Plants and Mines Maintain Access to Groundwater

 

SB 1122 by Estes – Relating to a limitation on the authority to curtail groundwater production from wells used for power generation or mining.

AECT Position: Support

 

Proposal

  • SB 1122 amends the Texas Water Code to ensure that permitted or historic use of groundwater that supports a power plant or its associated mine cannot be curtailed by a groundwater conservation district (GCD).

 

AECT Discussion

  • This bill serves one purpose: to promote a sufficient supply of electricity by protecting the historic use of groundwater by power plants and associated mines.
  • Power plants use groundwater for very limited uses: to ensure boiler water remains at a constant level; provide potable water for employees; and maintain fire protection systems.
  • Mines pump groundwater to enable safe excavation of the soil, control dust, dewater mines to ensure mines are not caved in, and to provide potable water for employees.
  • Power plants and mines require sustained access to groundwater, as they are frequently located well outside municipal water systems.
  • While power plant and mine access to groundwater is critically important, the total amount of groundwater used is very small.
  • Statewide, the groundwater pumped for power and mining use in 2012 was only 1.6% of all groundwater pumped. That is a small percentage of the total groundwater pumped in Texas.
  • Yet that access to groundwater is vital to the continued operation of power plants and mines, ensuring reliable electricity for the customers they serve.

SB 1122 will promote continued electric reliability by prohibiting curtailment of groundwater.

Click here to download a PDF of this issue paper.

 

Legislation to Enact Recommendations Included in the PUC’s “2015 Scope of Competition in Electric Markets in Texas”

 

SB 734 by Fraser – Relating to the setting of annual interest rates for utility deposits by the PUC (PUC Recommendation H.3)
AECT Position: Support

  •  SB 734 allows the PUC to set the rate of interest for the next calendar year on electric company deposits “on or before each December 1,” rather than specifically on December 1 or the next regular workday following December 1. SB 734 simply provides the PUC additional flexibility for when it sets annual interest rates for utility deposits.

SB 774 by Fraser – Relating to a study on periodic rate adjustment by electric utilities (PUC Recommendation H.2)
AECT Position: Support as Amended

  • As amended, SB 774 will reauthorize the 2011 Periodic Rate Adjustment (PRA) bill. The 2011 PRA bill is set to expire in January 2017. Under SB 774, the bill will expire on September 1, 2019. This ensures that the PRA mechanism will be available for use through the next two legislative sessions.
  • The bill revises the scope of a PUC report included in the 2011 PRA bill to more broadly study formula rate plans and other modernized ratemaking mechanisms. The report must be sent to the legislature on January 31, 2017.

SB 775 by Fraser- Relating to the repeal of the goal for natural gas use (PUC Recommendation E.1)
AECT Position: Support

  • Sec. 39.9044 of the Utilities Code requires at least 50 percent of non-renewable electric generation in Texas be fueled by natural gas. SB 775 removes this section.
  • The vast majority of non-renewable electric generation installed since Sec. 39.9044 was adopted in 1999 has been natural gas-fired, rendering Sec. 39.9044 unnecessary.

SB 776 by Fraser – Relating to the authority of the PUC to approve certain transmission facilities constructed by a municipally owned utility (PUC Recommendation B.3)
AECT Position: Amend

  • SB 776 requires a municipally-owned utility to obtain a certificate of convenience and necessity (CCN) before building transmission facilities outside its certificated service area.
  • SB 776 includes a standard for municipally-owned utilities that’s different from the standard for investor-owned utilities. AECT supports amending the legislation to ensure a level playing field for all utilities.

SB 777 by Fraser – Relating to the authority of the Public Utility Commission of Texas to restrict participation in the retail electric market for significant violations (PUC Recommendation A)
AECT Position: Support as Amended

  • AECT supports the concept of SB 777. The bill should be amended to clarify that the ban is on the individual who the PUC has sought action against. As filed, the text could be interpreted as creating an administrative burden on (and risk to) well-behaved REPs to ensure that a blacklisted individual is not in their employ. The filed language also implicitly allows employment of the blacklisted individual by other customer-impacting market participants.

SB 931 by Fraser – Relating to the goal for renewable energy and competitive renewable energy zones (PUC Recommendations B.1 and E.2)
AECT Position: Neutral

  • The Competitive Renewable Energy Zone (CREZ) project was completed in 2013. SB 931 would clarify that future proposed transmission projects, even those located in the CREZ, must meet the same adequacy and need criteria as non-CREZ transmission lines.
  • Texas’ renewable portfolio standard (RPS) set a mandate that at least 5,880 MW of renewable generation should be installed in Texas by 2025. The state currently has over 12,000 MW of renewable generation online, making the mandate unnecessary. SB 931 removes the goal from statute; it retains the renewable energy credit (REC) trading program.

SB 932 by Fraser – Relating to the authority of the PUC to retain assistance for federal proceedings affecting certain electric utilities and consumers (PUC Recommendation C)
AECT Position: Support

  • SB 932 would allow the PUC to hire assistance for federal proceedings in areas located outside the ERCOT grid. These utilities are regulated by FERC, in addition to the PUC.
  • It is appropriate for the PUC to have resources available to participate in these cases, which often require specialized knowledge of FERC.

 SB 933 by Fraser – Relating to Relating to the authority of the PUC to review transmission interconnections that enable imports or exports from the ERCOT power grid (PUC Recommendation B.2)
AECT Position: No Position 

  • SB 933 would require any interconnection between the ERCOT transmission grid and a neighboring grid to be approved by the PUC and found in the public interest.
  • This ensures the PUC can formally assess the impact of an interconnection between power markets.

Click here to download a PDF of this issue paper.