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Energy & Environment

State Lawmakers Approve Overhaul Of Texas Grid In Response to Blackout

ERCOTgridphoto
Julia Reihs
/
KUT
The control room at the Electric Reliability Council of Texas, the state's grid operator.

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On Sunday, the Texas House of Representatives gave initial approval to a series of reforms intended to guard against future blackouts like the one that gripped the state in February 2021. Many of those reforms were wrapped into one bill called Senate Bill 3.

Provisions within Senate Bill 3 touch on everything from regulating some retail electricity plans to establishing an energy emergency alert system. But the most contentious proposals deal with which parts of the state’s power infrastructure will need to be “winterized.”

There has been general agreement among lawmakers that power generators, which broke down in the cold, should be required to better prepare for freezing weather. But natural gas infrastructure also failed in the freeze and was unable to deliver fuel to generators, worsening the crisis.

Despite pushback from the gas industry, Senate Bill 3 includes winterization mandates on some parts of the state’s natural gas infrastructure. But the bill excludes other parts of the supply chain from winterization and does not require all new gas wells to be winterized.

The fact that only parts of Texas natural gas infrastructure will be winterized under the plan has some observers worried.

“I fear that it's just not going to be enough,” says Dan Cohan, a professor of Civil Engineering at Rice University. “Whoever has those direct lines into the power plants and winterizes those is going to point upstream and say ‘well those upstream people couldn’t get us enough gas.’"

Others say that the penalties outlined in the bill will not be high enough to get gas companies to comply. Currently, the bill creates fines as low as $5,000 a day for not winterizing.

During the blackout “these companies were making tens of billions of dollars in profits,” said Austin Democratic State Rep. Donna Howard, who proposed an amendment that she said would make “it more costly to avoid weatherization than it is to pay the fine.”

Her amendment failed.

Despite those concerns, it seems that no other legislation this session will be as consequential for the future of the state’s electric grid.

Among other things, the bill tightens rules around when power plants are allowed to shut down for maintenance; regulates retail electric plans that are tied to the wholesale energy market; creates a Texas Energy Reliability Council to identify weak spots in the Texas grid; and creates a system to alert Texans of impending energy emergencies.

“It is the bill that addresses those fundamental issues that we identified early on: oversight and accountability, communication failures and weatherization,” said Marshall Republican State Rep. Chris Paddie, who authored the House version of the bill. “This is one of the biggest bills that relate to utilities, probably, going back to deregulation.”

The version of the bill approved by the Texas House also differs from the Senate version in significant ways. Most notably, the House stripped a provision in the Senate bill that renewable energy generators said would have unfairly targeted them with extra costs.

Once Senate Bill 3 is fully approved by the House those differences will need to be resolved in a conference committee before the bill can head to Governor Greg Abbott.