Texas Senate passes bill to overhaul utility regulator, with more to come
Measure would expand the PUC board to five, guarantee majority not from power industry
More than a month after the deadly storms that crippled the state’s electric grid, lawmakers passed their first major reforms of the state’s top utility regulator and promised more changes to come.
The Texas Senate voted 30-0 on Thursday to overhaul the Public Utility Commission, expanding its board from three to five members and guaranteeing that at least three of them are not from the electricity industry to assure more viewpoints are being taken into account when they make decisions, particularly in an emergency.
That move comes as the Senate races to pass another bill as early as next week that would give the revamped PUC new teeth, including the ability to fine power companies up to $1 million for not weatherizing power plants and transmission lines. That same bill would also allow the Texas Railroad Commission to fine natural gas producers up to $1 million for failing to weatherize properly.
Both power plants and natural gas providers failed to winterize their facilities despite past failures and recommended fixes dating
back a decade. State health officials have attributed 111 deaths to last month’s freeze, many caused by hypothermia, according to preliminary data released Thursday.
“Reform is desperately needed,” state Sen. Charles Schwertner, R-Georgetown, said during a debate of the changes in the makeup of the utility regulator’s board.
The PUC has been in turmoil since the storms hit Texas. All three board members appointed by the governor have resigned, and lawmakers have publicly scolded commissioners for not exercising enough of their authority to prevent the breakdowns that left millions of Texans without power as temperatures plummeted.
A key part of that, Schwertner said, is making sure the board has a different makeup so its members better understand the ramifications their choices have on the public.
“We didn’t want just industry insiders,” Schwertner said of Senate Bill 2154, which would expand the PUC board and now heads to the Texas House for consideration. Both chambers have to pass identical legislation to get it to Gov. Greg Abbott for his approval.
The heavier lift lies ahead with the other bill, SB3, which passed through a key committee in the Senate and now heads to the floor. That bill creates an improved power outage alert network, aims to fix communication problems between agencies, demands utility companies winterize facilities and would essentially tax wind and solar power generators extra because they do not produce reliable energy in cold winter months like fossil fuels.
Schwertner’s bill doesn’t offer any funding to help electric companies or natural gas companies to weatherize their facilities.
“To me, it’s the cost of doing business,” Schwertner said.
That has got some pushback from industry groups.
Todd Staples of the Texas Oil and Gas Association warned lawmakers during a committee hearing Thursday that demanding gas wells and pipelines be winterized means little if there is no electricity and roads are impassable for workers to keep the gas flowing. The natural gas industry has argued that disruptions to the fuel in February weren’t due to the weather but to the fact that electricity was out and crews could not get to the field to fix the equipment.
Still, Schwertner said giving the PUC and the Railroad Commission, which has jurisdiction over natural gas providers, the ability to hand out major fines is meant to send a message about how important weatherizing the grid is to the Legislature.
“It puts an emphasis on it,” Schwertner said.
After damaging winter storms in 2011, the state’s utility grid monitors recommended power generators winterize their facilities, but it was never mandated and most did little.
But wind and solar industry officials are also pushing back against the legislation over the fees they would also face. Although wind and solar have become a major piece of the state’s electric grid, Schwertner said they are not reliable during winter, creating a cost to the state as it tries to assure reliable generation both in the summer and in the winter.
Under his bill, the Electric Reliability Council of Texas, which manages the state’s grid, would create a fee system for wind and solar to account for their lack of production during winter storms. It’s an idea long advocated by conservative groups that believe federal subsidies for wind and solar production have given those resources an unfair edge.
State Sen. Nathan Johnson, D-Dallas, is also pushing back against that part of the bill, questioning why a state that values free markets is trying to impose extra fees on some players in it.
“The idea that we’re going to have a market — a competitive free market — where we impose some costs on some players because they are operating too inexpensively, is that what we are talking about with renewables?” Johnson asked.
Johnson said he’s struggling with the idea that Texas should pass down fees to producers of renewable energy in order to offset federal subsidies that they receive. He said instead of a free market, Texas is building a “monstrosity” of regulations and counter-regulations.