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Relating to extreme weather preparedness of critical electric and natural gas infrastructure; authorizing administrative penalties.
Estimated Two-year Net Impact to General Revenue Related Funds for SB1750, Committee Report 1st House, Substituted: a negative impact of ($3,454,620) through the biennium ending August 31, 2023.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
SB 1750 would require power generation companies, ERCOT, and entities engaged in the production, transport, gathering, storage, or shipping of natural gas to establish and submit a winter preparedness emergency operations plan subject to their respective jurisdictions to the Public Utility Commission of Texas. The bill would also require any of the above entities to respond to a notice of any potential deficiencies in their emergency operations plans, including winter weatherization and emergency operations standards recommended by the PUC or the Railroad Commission within 30 days or be subject to an administrative penalty.
The PUC and the Railroad Commission may penalize for failure to timely submit an emergency operations plan or respond to a notice of potential deficiency.
Texas has a legitimate interest in preventing a repeat of the significant power grid failures caused by the extreme winter storms in February. In addressing the issue, the state should take a light regulatory approach that recognizes industry's inherent market based incentive to establish preventative weatherization protocols. SB 1750 generally appears to take this approach. None of the requirements appear to be onerous or overly burdensome. We do note that the open-ended administrative penalty for noncompliance or untimely compliance may benefit from being statutorily set at a reasonable amount that is not left to the regulator's discretion. With these things in mind, Texas Action is neutral on SB 1750.