HB4817 - Relating to reliability requirements and associated locational marginal pricing for certain electric generation facilities.

      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.