HB 4581

relating to temporary emergency energy facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 39.918, Utilities Code, is amended by
amending Subsections (d) and (f) and adding Subsections (f-1),
(f-2), (f-3), (k), (l), (m), and (n) to read as follows:
(d)  A facility [Facilities] described by Subsection (b)(1):
(1)  must be operated in isolation from the bulk power
(2)  may not be included in independent system
(A)  locational marginal pricing calculations;
(B)  capable of generating electric energy within
three hours after being connected to a demand source.
(f)  A transmission and distribution utility shall[, when
reasonably practicable,] use a competitive bidding process to lease
facilities under Subsection (b)(1).
(f-1)  A transmission and distribution utility may not enter
into a lease under Subsection (b)(1) unless:
(1)  the commission first approves the lease in a rate
proceeding or a separate contested case hearing; or
(2)  the lease includes a provision that allows
alteration of the lease based on commission order or rule.
(f-2)  Notwithstanding Subsections (f) and (f-1)(1), a
transmission and distribution utility may enter into a lease under
Subsection (b)(1) without competitive bidding or prior commission
(1)  the transmission and distribution utility lacks
the leased generating capacity necessary to aid in restoring power
to the utility's customers during a significant power outage; and
(2)  the amount of leased generating capacity does not
significantly exceed the amount of megawatts necessary to restore
electric service to the utility's customers during a significant
(f-3)  A transmission and distribution utility that enters
into a lease in the manner provided by Subsection (f-2) shall
provide documentation to justify the amount of leased generating
capacity during the first base rate proceeding after the date the
(k)  The Texas Division of Emergency Management, in
coordination with the commission, shall develop an annex to the
state emergency management plan prepared under Section 418.042,
Government Code, that addresses planning for deploying facilities
leased, operated, procured, or owned under Subsection (b).  The
annex must include procedures for transmission and distribution
utilities to maintain a current list of facilities leased,
operated, procured, or owned under Subsection (b), agreements
submitted to the division under Subsection (m), and facilities
available to be deployed through mutual aid agreements.
(l)  The list maintained under Subsection (k) must be
accessible to each transmission and distribution utility, the
commission, the Texas Division of Emergency Management, and each
state agency with emergency response duties. Each transmission and
distribution utility that leases, operates, procures, or owns a
facility described by Subsection (b) shall notify the commission
not later than the 30th day after the date of a change in the
utility's lease or ownership of the facility.
(m)  The commission by rule shall require a transmission and
distribution utility that leases, operates, procures, or owns a
facility described by Subsection (b) to offer to enter into mutual
aid agreements with other transmission and distribution utilities
to facilitate the deployment of undeployed facilities on the
request of another transmission and distribution utility.  Each
transmission and distribution utility shall submit any agreement
entered into under this subsection to the commission and report to
the commission not later than the 30th day after the date of any
change in the submitted agreement.
(1)  consider any failure to deploy a facility
described by Subsection (b) that is leased, operated, procured, or
owned by a transmission and distribution utility, including a
failure to deploy a facility under the terms of a mutual aid
agreement, in the next base rate proceeding of the transmission and
(2)  if the failure to deploy described by Subdivision
(1) was not reasonable, revise the utility's rate of return on
investment with a presumption that the investment in the facility
SECTION 2.  The Public Utility Commission of Texas shall
require a transmission and distribution utility to which Section
39.918(m), Utilities Code, as added by this Act, applies to make
offers for mutual aid agreements before the 2026 hurricane season.
SECTION 3.  This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution.  If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2025.