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Photo courtesy of The Texas Senate The Senate Business and Commerce Committee

Energy companies would be required to weatherize critical facilities or face steep fines under a bill passed without objection by the Senate March 29.

The bill, SB 3 by Georgetown Senator Charles Schwertner, would implement a number of reforms to the state wholesale and retail electric market that are intended to prevent a days-long power outage as occurred in February.

A recent survey from the University of Houston's Hobby School found that more than two-thirds of Texans on the state grid say they lost power for at least 30 hours during that week.

The state announced last week that one hundred and eleven people are known to have died from causes related to the storm. Schwertner told members that, unlike past legislative efforts, this bill includes meaningful reform intended to prevent a grid collapse from ever happening again.

"This is an issue that is serious to us, that we take control of, and responsibility for - and one that we're going to see to the end," he said.

The bill would require that electric, natural gas and other energy companies harden their facilities to protect them from a storm of the magnitude the state faced in February. Companies found not to have complied or acted in good faith could face escalating penalties, ranging from a simple letter of reprimand all the way up to a one million dollar fine, per violation, per day.

The bill also seeks to improve communication between energy regulators and the public when a long-term power outage is possible. The UH survey found that 81 percent of Texans believed they didn't receive timely and accurate information before, during and after the outages.

"We have weather alerts, we have hurricane alerts, we have Amber alerts," Schwertner said. "This puts in place a 'power outage alert' which will essentially do the same thing, regarding alerting citizens that they need to take precautions: water, food, fuel up, basic things that would've helped a lot of individuals out if they had known they were going to be without power for four days."

The bill would direct the Public Utility Commission to create this statewide power outage alert network and develop criteria under which it would be used.

Another major issue raised during investigations into the power outage was the exorbitant prices charged to electric providers when regulators raised the wholesale price of electricity to its statutory cap of $9,000 for more than 30 hours, leading to billions in overcharges.

SB 3 would permit that high cap to remain but directs regulators to develop an alternative cap based on market conditions. After 12 hours at the statutory cap, should regulators determine that cap pricing continue, it then moves to that lesser, market-sensitive cap.

There's more grid reform to come, according to Lt. Governor Dan Patrick.

"The work is just beginning…but this is a great first step," he said. The measure will now head to the House for consideration.

Also Monday, the Senate gave initial approval to SB 8, which would prohibit abortions after a fetal heartbeat is detected. According to bill author and Mineola Senator Bryan Hughes, a heartbeat is proof of human life. "When there's a heartbeat present, the state of Texas is saying that's a human being deserving of protection," he said. "We're going to protect that life."

Though the bill doesn't set a specific date after which abortions are restricted, fetal heartbeats are typically detected around the sixth week of pregnancy. Current US law generally allows abortions until 20 weeks. Texas would join eleven other states in passing a "heartbeat bill."

All those laws have been enjoined by federal courts, but Hughes said that he thinks this bill will pass constitutional muster because it applies civil, rather than criminal or administrative penalties. The bill will face one more vote before it heads to the House.

Senate panel considers ERCOT reform

The Senate Business and Commerce Committee heard testimony on a bill that would increase oversight for the independent organization that runs the state power grid. The Electric Reliability Council of Texas manages both the operation of the electric system and the market where generators and distributors buy and sell electricity.

The actions of ERCOT during the February storm have been under a legislative microscope as lawmakers try to determine what caused the days-long power outage that left millions of Texans without electricity and water during one of the longest hard freezes ever seen in the state.

ERCOT officials faced criticism for failing to adequately warn elected officials and the public about the danger of the approaching storm and the possibility of days without power. ERCOT operators called for large scale blackouts as the crisis began in order to prevent a total collapse of the power grid that could've left the state without power for weeks.

ERCOT officials made the call to keep electricity prices at their statutory maximum for 30 hours after the crisis had passed, an action one independent market monitor says led to billions in electric overcharges.

In the days following the storm, several members of the ERCOT board, none of whom lived in Texas, tendered their resignations. All three members of the Public Utility Commission, the state regulator charged with ERCOT oversight, have since resigned.

The Senate has already passed legislation reforming the PUC board and addressing electric overcharges; the bill considered March 30 would make changes to the selection and makeup of members of the ERCOT board.

SB 2, by North Richland Hills Senator and Business and Commerce Committee chair Kelly Hancock, would require that all ERCOT board members live in Texas.

"The ERCOT grid is unique in its energy-only market structure, and qualified utility professionals that understand this market should be the ones considering the changes to market protocols and issues before the board," Hancock said. "It kind of helps if they live within those areas."

Under SB 2 the governor would appoint - and the Senate would confirm, the ERCOT board chairman. It would also require PUC approval of any major changes to protocols or procedures.

Hancock told members he is considering additional reforms to add to SB 2, but wanted more input from stakeholders before offering a revised bill.

Also Tuesday, the Senate Finance Committee unanimously approved its proposal for state spending through 2023. Committee chair and Flower Mound Senator Jane Nelson told members that despite the challenges the state faced through the COVID-19 pandemic, smart fiscal policy has left it in good shape going forward.

"Because we have practiced fiscal responsibility over the years, Texas is better equipped than any other state to overcome these challenges," she said. "It is a testament to our resilience that we are bringing forward a balanced budget that will keep Texas safe, strong, healthy and prosperous."

The Senate's budget maintains increased funding for public education passed in 2019 and allocates $250 billion in both state and federal money.

There are billions more in federal money on the way as part of federal COVID relief passed in early March, but Nelson said last week that it was unlikely to arrive before the Legislature adjourns on May 31.

She said Tuesday that she's working with her House counterpart, Appropriations Chair Greg Bonnen of Friendswood, on legislation to ensure that lawmakers have a say in how this money is allocated when they aren't in session. Nelson told members she hopes to bring the bill to the floor for consideration by the full Senate next Tuesday.

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