Bill

HB 1397

86(R) - 2019
House State Affairs
House State Affairs
Electricity

Vote Recommendation

Neutral
  • Neutral
  • Neutral
  • Neutral
  • Neutral
  • Neutral

Author(s)

Dade Phelan

Co-Author(s)

Will Metcalf
Joe Moody
Chris Paddie
Four Price

Sponsor(s)

Robert Nichols

Bill Caption

Relating to the establishment of rates for certain non-ERCOT utilities.

Fiscal Notes

No significant fiscal implication to the State is anticipated.


Bill Analysis

HB 1397 would allow electric utilities that operate outside of the Electric Reliability Council of Texas to apply for a rate rider from the Texas Public Utility Commission in order to more quickly recover the electric utility‚Äôs power generation investment and any costs associated with it, and to encourage generation investment.

Vote Recommendation Notes

As a state with a rapidly growing population, Texas needs to expand electricity generation capacity to meet increased demand. Ultimately the best way to achieve that goal is through reduced regulation and increased competition in a free market environment that operates with the lightest possible regulatory touch. Under such a system, the normal laws of supply and demand would apply and the amount of generation capacity would match the willingness of consumers to pay for it.

Unfortunately, our electric utilities do not operate in anything remotely approaching a true free market environment so the normal laws of supply and demand do not apply. We do not have a basis to determine whether the solution proposed by this legislation is a good way to encourage generation investment in the current overregulated environment. For this reason we remain neutral on HB 1397 but we do encourage the legislature to consider ways to bring lighten the regulatory environment in the electricity industry. 

Organizations Opposed

Texas Association of Manufacturers
Texas Chemical Council
Texas Oil and Gas Association