Virdell Bill Caps Opt-Out Plants At $50 Per Megawatt Hour

The text as introduced · 992 words

By: Virdell
H.B. No. 4817

A BILL TO BE ENTITLED

AN ACT

relating to reliability requirements and associated locational

marginal pricing for certain electric generation facilities.

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

SECTION 1. Section 39.1592, Utilities Code, is amended to

read as follows:

Sec. 39.1592. GENERATION RELIABILITY REQUIREMENTS. (a)

This section applies only to an electric generation facility in the

ERCOT power region [ for which a standard generator interconnection

agreement is signed on or after January 1, 2027, ] that has been in

operation for at least one year, and that is not a self-generator.

(a-1) In this section:

(1) "Pooling" or "pooled generation" means a

combination of electric generation facilities in the same load zone

that elect to meet the reliability standard established under this

Section by sharing, supplementing, or contracting with on-site or

off-site resources.

(2) "Reliability standard" means the percentage of an

electric generation facility's nameplate capacity that is

available to be dispatched under most operating conditions absent

extreme circumstances.

(b) Not later than January 1, 2027[ December 1 of each year ],

the commission shall establish a single reliability standard for

all electric generation facilities. The commission may adjust the

reliability standard but may not require less than the ability to

run at an availability of 50 percent of the nameplate capacity of

the equipment operated by the generator. [ an owner or operator of

an electric generation facility, other than a battery energy

storage resource, shall demonstrate to the commission the ability

of the owner or operator's portfolio to operate or be available to

operate when called on for dispatch at or above the seasonal average

generation capability during the times of highest reliability risk,

as determined by the commission, due to low operation reserves, as

determined by the commission . The owner or operator of an electric

generation facility must be allowed to meet the reliability

standard established under [ performance requirements described by ]

this subsection by pooling with other electrical generation

facilities within the same load zone. [ supplementing or

contracting with on-site or off-site resources, including battery

energy storage resources. The commission shall determine the

average generation capability based on expected resource

availability and seasonal-rated capacity on a standalone basis. ]

(c) The commission shall adopt rules for calculating a

settlement price cap, accounting for all subsidies available, for

electric generation facilities that opt out of the reliability

standard established under Subsection (b). The settlement price

cap for electric generation facilities that opt-out of the

reliability standard:

(1) shall not be greater than $50 per megawatt hour on

January 1, 2027; and

(2) shall not be greater than $30 per megawatt hour on

or before January 1, 2037. [ The commission shall require the

independent organization certified under Section 39.151 for the

ERCOT power region to:

(1) enforce the requirements of Subsection (b) by

imposing financial penalties, as determined by the commission, for

failing to comply with the performance requirements described by

that subsection; and

(2) provide financial incentives, as determined by the

commission, for exceeding the performance requirements described

by that subsection. ]

(d) The real-time settlement price for electric generation

facilities that opt-out of the reliability standard established

under Subsection (b) may not fall below $0 per megawatt hour.

(e) An electric generation facility that opts-out of the

reliability standard under Subsection (b) and sells power when the

real-time settlement price is between $0 per megawatt hour and the

cap calculated under Subsection (c) shall receive the real-time

settlement price. At no time shall an electric generation facility

that opts-out of the reliability standard under Subsection (b)

receive more than the cap calculated under Subsection (c).

(f) Any revenue from power sold in the ERCOT market subject

to the settlement price cap calculated under Subsection (c) shall

be subtracted from the total generation billed to all Retail

Electric Providers for each period the power is sold.

(g) The commission shall establish set dates for each owner

or operator of an electric generation facility or pooled generation

facility to elect to meet the reliability standard established

under Subsection (b), which shall not be more often than four times

per year.

(h) Electric generation facilities that elect to meet the

reliability standard established under Subsection (b) by pooling

must meet the reliability standard based upon the combined

nameplate capacity of the pooled generation sites. Pooled

generation facilities must bid into the market as a single

generation site.

(i) Any owner or operator of an electric generation facility

or pooled generation facility that made the election under

Subsection (g), but failed to meet the reliability standard

established under Subsection (b) shall pay the difference between

the replacement power to cover the load lost and the offered price

of the undelivered load on the real-time market. Should the offered

price of the generation facility or pooled generation facility be

greater than 80 percent of the high system-wide offer cap, any

failure to meet the reliability standard shall be calculated at 80

percent of the high system-wide offer cap instead of the offered

price.

(j) A penalty assessed against an owner or operator of an

electric generation facility or pooled generation facility under

Subsection (i) shall be subtracted from the total generation billed

to all Retail Electric Providers for each period such penalty is

assessed.

(l) [ (d) ] The independent organization certified under

Section 39.151 for the ERCOT power region may not impose penalties

under Subsection (h) [ (c) ]:

(1) for resource unavailability due to planned

maintenance outages or transmission outages; or

(2) on resources that are already subject to

performance obligations during the highest reliability risk hours

under the day-ahead market rules or other ancillary or reliability

services established by the commission or the independent

organization . [ ;or

(3) during hours outside a baseline established by the

commission that includes morning and evening ramping periods. ]

SECTION 2. This Act takes effect September 1, 2025.