Guillen Bill Lets Utilities Skip Generator Lease Approval

The text as introduced · 754 words

By: Guillen
H.B. No. 4581

A BILL TO BE ENTITLED

AN ACT

relating to temporary emergency energy facilities.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 39.918, Utilities Code, is amended by

amending Subsections (d) and (f) and adding Subsections (f-1),

(f-2), (f-3), (k), (l), (m), and (n) to read as follows:

(d) A facility [ Facilities ] described by Subsection (b)(1):

(1) must be operated in isolation from the bulk power

system; [ and ]

(2) may not be included in independent system

operator:

(A) locational marginal pricing calculations;

(B) pricing; or

(C) reliability models ;

(3) must be:

(A) mobile; and

(B) capable of generating electric energy within

three hours after being connected to a demand source.

(f) A transmission and distribution utility shall[ , when

reasonably practicable, ] use a competitive bidding process to lease

facilities under Subsection (b)(1).

(f-1) A transmission and distribution utility may not enter

into a lease under Subsection (b)(1) unless:

(1) the commission first approves the lease in a rate

proceeding or a separate contested case hearing; or

(2) the lease includes a provision that allows

alteration of the lease based on commission order or rule.

(f-2) Notwithstanding Subsections (f) and (f-1)(1), a

transmission and distribution utility may enter into a lease under

Subsection (b)(1) without competitive bidding or prior commission

approval if:

(1) the transmission and distribution utility lacks

the leased generating capacity necessary to aid in restoring power

to the utility's customers during a significant power outage; and

(2) the amount of leased generating capacity does not

significantly exceed the amount of megawatts necessary to restore

electric service to the utility's customers during a significant

power outage.

(f-3) A transmission and distribution utility that enters

into a lease in the manner provided by Subsection (f-2) shall

provide documentation to justify the amount of leased generating

capacity during the first base rate proceeding after the date the

lease begins.

(k) The Texas Division of Emergency Management, in

coordination with the commission, shall develop an annex to the

state emergency management plan prepared under Section 418.042,

Government Code, that addresses planning for deploying facilities

leased, operated, procured, or owned under Subsection (b). The

annex must include procedures for transmission and distribution

utilities to maintain a current list of facilities leased,

operated, procured, or owned under Subsection (b), agreements

submitted to the division under Subsection (m), and facilities

available to be deployed through mutual aid agreements.

(l) The list maintained under Subsection (k) must be

accessible to each transmission and distribution utility, the

commission, the Texas Division of Emergency Management, and each

state agency with emergency response duties. Each transmission and

distribution utility that leases, operates, procures, or owns a

facility described by Subsection (b) shall notify the commission

not later than the 30th day after the date of a change in the

utility's lease or ownership of the facility.

(m) The commission by rule shall require a transmission and

distribution utility that leases, operates, procures, or owns a

facility described by Subsection (b) to offer to enter into mutual

aid agreements with other transmission and distribution utilities

to facilitate the deployment of undeployed facilities on the

request of another transmission and distribution utility. Each

transmission and distribution utility shall submit any agreement

entered into under this subsection to the commission and report to

the commission not later than the 30th day after the date of any

change in the submitted agreement.

(n) The commission shall:

(1) consider any failure to deploy a facility

described by Subsection (b) that is leased, operated, procured, or

owned by a transmission and distribution utility, including a

failure to deploy a facility under the terms of a mutual aid

agreement, in the next base rate proceeding of the transmission and

distribution utility; and

(2) if the failure to deploy described by Subdivision

(1) was not reasonable, revise the utility's rate of return on

investment with a presumption that the investment in the facility

was not reasonable.

SECTION 2. The Public Utility Commission of Texas shall

require a transmission and distribution utility to which Section

39.918(m), Utilities Code, as added by this Act, applies to make

offers for mutual aid agreements before the 2026 hurricane season.

SECTION 3. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.