Bill that would increase oversight of Texas’ largest energy users gets OK’d in Texas House

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The Texas House approved a bill Tuesday that would give Texas more oversight over energy transactions between power generators and the state’s largest consumers of electricity.

Senate Bill 6 also proposes new ways to assess the amount of electricity that is available to the Electric Reliability Council of Texas, the main manager of the state’s grid.

The bill now returns to the Senate. Legislators in the upper chamber must agree to the changes made to the bill before it goes to Abbott.

The bill would give ERCOT the power to oversee energy transactions between power generators and large consumers that don’t involve the state’s grid. ERCOT would also have the authority to cut their power and use it during an emergency.

State Sen. Phil King, R-Weatherford, the bill’s author, has said his bill will allow the state to better manage electric supply at times of high demand.

Power generators and companies said the new oversight measures proposed by the bill would be excessive for a market accustomed to the free trade of energy without requirements imposed by the state. They have said the bill could discourage companies from doing business in Texas. King said the new rules are not meant to do so.

“I think what this bill is seeking to do is set out clear rules where large load customers that want to come to Texas know what they're getting when they get here,” said state Rep. Ken King, R-Canadian, who sponsored the bill in the lower chamber.

The bill would also require companies to disclose whether they have other projects in the state. Sen. Phil King said this would give ERCOT information to better predict and meet energy demands in the future more accurately. That’s necessary to determine the state’s electricity needs without overbuilding, which would result in higher rates for everyday consumers, he said.

Texas will need almost double the electricity it consumes today to meet a demand driven mainly by data centers and the oil and gas industry, a demand that ERCOT President Pablo Vegas said the grid, in its current state, is capable of meeting when that demand arrives.

Lawmakers added and removed some provisions from the bill during a debate in the House on Monday. One amendment got rid of a previously accepted proposal by state Rep. Drew Darby, R-San Angelo, which gave new large businesses in Texas the option to get electricity faster from the grid if they let ERCOT reduce their power consumption at will.

Another amendment approved Monday, introduced by state Rep. Richard Peña Raymond, D-Laredo, would inject any excess electricity back into the grid and use any money from selling that energy to lower water bills for electricity ratepayers.

Dan Diorio, senior director of state policy at the Data Center Coalition, a national group, said they were receptive to the changes sent to the upper chamber.

The Data Center Coalition "is appreciative that changes made to Senate Bill 6 during the legislative process intend to balance the need to support economic development with efforts to ensure the continued stability of the Texas electricity grid," Diorio said.

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