Texas House wants to go further than Senate to protect state’s main power grid as time to agree on bills winds down

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The Texas House as soon as Sunday could debate how to strengthen the state’s main electricity grid in the wake of February’s catastrophic power outages with a proposal that goes further than the Senate’s in preparing for extreme weather.

The upper chamber already passed Senate Bill 3, but the House State Affairs Committee added more requirements for natural gas facilities to properly prepare for extreme weather, though the legislation doesn’t currently say who would cover costs for weatherizing such infrastructure.

The House proposal also would not target renewable energy sources, like wind and solar, to cover the costs of having reserve power available to the main Texas grid. SB 3 would instead require the Public Utility Commission of Texas, which oversees the state’s main power grid operator, to review whether there could be more reserve power available from non-renewable sources.

Under the House proposal, Texas regulators would also have to ensure natural gas facilities do not lose electricity during an emergency, as many did in February, exacerbating blackouts.

Wherever the House lands on Sunday, the two chambers only have days to come to an agreement to approve priority legislation responding to the winter catastrophe and send it to the governor’s desk by the Memorial Day closing date of the legislative session.

Texas electric providers currently cover costs of making sure there is reserve power, which is called “ancillary services.” The Senate wanted to saddle only renewable energy sources with such costs. State Rep. Donna Howard, D-Austin, called the House State Affairs Committee’s unanimous decision to remove that provision more “holistic.”

State Rep. Chris Paddie, R-Marshall, authored the House version, which would also require all natural gas power plants to register as critical infrastructure so the grid operator doesn’t disconnect their electricity. Dozens of natural gas companies failed to do the paperwork that would have kept their facilities powered during an emergency prior to February’s winter storm. Utilities cut their electricity at the very moment power plants most needed fuel.

Under the current version of SB 3, this process of ensuring natural gas facilities are registered as critical infrastructure will be carried out jointly by the PUC and the industry-friendly Railroad Commission, which regulates the state’s massive oil and gas industry. But the gas industry and electric industry, regulated by the PUC, typically don’t get along, according to a former independent watchdog of power grid operator Electric Reliability Council of Texas.

“It frankly at some levels is a pretty dysfunctional relationship,” said Beth Garza, ERCOT’s watchdog from 2014 to 2019.

She added that “forcing the two industries to work together and produce something is a step in the right direction.”

The House version also tasks the Railroad Commission with ensuring natural gas pipeline facilities can maintain service during extreme weather if the pipeline serves a natural gas powered generation plant providing power to the grid.

The agency has known about the grid’s vulnerabilities to winter weather for years, but it has repeatedly ignored recommendations to prepare for such weather.

If that provision of the legislation is approved, new weatherization regulations brought by the agency likely wouldn’t happen until at least after the 2022 winter.

Still, lawmakers like Howard were encouraged by the House version.

“I really appreciate all the work you’ve put into this,” Howard said to Paddie at a House State Affairs Committee hearing on the bill. “It’s really a huge step forward.”

Energy experts at a press conference this week said the House version is moving in the right direction, but they’ve expressed concern about whether agencies such as the Railroad Commission that have ignored weatherization recommendations in the past are up to the task now.

After all, gas generation was the most significant component of February’s power outages. Fuel shortages enhanced the cascading crises during the storm as natural gas-fired power plants were at times unable to get enough fuel to run plants. The inability of natural gas-fired plants to generate electricity was due to equipment failures in the weather as well as the fuel shortages.

The House committee’s version of the bill retained a Senate provision that would implement an emergency statewide alert system. In the days leading up to the winter storm, Texans were not warned about the prospect of widespread power outages lasting for days in freezing temperatures.

During the days the power was out, the Texas Division of Emergency Management didn’t provide accessible and life-saving updates on outages and inclement weather. More than 100 people died.

As the Senate’s approach responding to the storm came in the sweeping SB 3, the House put forward a host of its own standalone proposals. One of those, House Bill 16, is headed to the governor’s desk. It would not allow residential or small-business electricity customers in Texas to sign up for electricity plans where wholesale prices for power are passed to customers. Those plans include the kind that caused February power bills to skyrocket for several customers of Griddy Energy and other companies. Some customers reported bills over $15,000.