HB3374 - Relating to electricity pricing rules and operating procedures that eliminate or compensate for market distortion caused by certain federal tax credits.

  89R4479 CXP-F     By: Patterson H.B. No. 3374       A BILL TO BE ENTITLED   AN ACT   relating to electricity pricing rules and operating procedures that   eliminate or compensate for market distortion caused by certain   federal tax credits.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subchapter D, Chapter 39, Utilities Code, is   amended by adding Section 39.171 to read as follows:           Sec.   39.171.     MARKET DISTORTION RESPONSE. (a)   Notwithstanding any other provision of this chapter, the commission   and the ERCOT independent system operator shall adopt rules,   operating procedures, and protocols to eliminate or compensate for   any distortion in electricity pricing in the ERCOT power region   caused by a federal tax credit provided under 26 U.S.C. Section 45.           (b)     Rules, operating procedures, and protocols adopted   under this section must ensure that costs imposed on the system by   the sale of electricity that is eligible for a federal tax credit   provided under 26 U.S.C. Section 45, including costs of maintaining   sufficient capacity to serve load at the summer peak demand caused   by the loss of new investment from below-market prices, are paid by   the parties that impose the costs.           (c)     In conjunction with adopting rules, operating   procedures, and protocols under this section, the commission and   the ERCOT independent system operator shall eliminate any rules,   operating procedures, or protocols that attempt to adjust   electricity prices to reflect the value of reserves at different   reserve levels based on the probability of reserves falling below   the minimum contingency level and the value of lost load.          SECTION 2.  This Act takes effect September 1, 2025.