HB 4817

relating to reliability requirements and associated locational
marginal pricing for certain electric generation facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 39.1592, Utilities Code, is amended to
Sec. 39.1592.  GENERATION RELIABILITY REQUIREMENTS.  (a)
This section applies only to an electric generation facility in the
ERCOT power region [for which a standard generator interconnection
agreement is signed on or after January 1, 2027,] that has been in
operation for at least one year, and that is not a self-generator.
(1)  "Pooling" or "pooled generation" means a
combination of electric generation facilities in the same load zone
that elect to meet the reliability standard established under this
Section by sharing, supplementing, or contracting with on-site or
(2)  "Reliability standard" means the percentage of an
electric generation facility's nameplate capacity that is
available to be dispatched under most operating conditions absent
(b)  Not later than January 1, 2027[December 1 of each year],
the commission shall establish a single reliability standard for
all electric generation facilities.  The commission may adjust the
reliability standard but may not require less than the ability to
run at an availability of 50 percent of the nameplate capacity of
the equipment operated by the generator.  [an owner or operator of
an electric generation facility, other than a battery energy
storage resource, shall demonstrate to the commission the ability
of the owner or operator's portfolio to operate or be available to
operate when called on for dispatch at or above the seasonal average
generation capability during the times of highest reliability risk,
as determined by the commission, due to low operation reserves, as
determined by the commission.  The owner or operator of an electric
generation facility must be allowed to meet the reliability
standard established under[performance requirements described by]
this subsection by pooling with other electrical generation
facilities within the same load zone.  [supplementing or
contracting with on-site or off-site resources, including battery
energy storage resources.  The commission shall determine the
average generation capability based on expected resource
availability and seasonal-rated capacity on a standalone basis.]
(c)  The commission shall adopt rules for calculating a
settlement price cap, accounting for all subsidies available, for
electric generation facilities that opt out of the reliability
standard established under Subsection (b).  The settlement price
cap for electric generation facilities that opt-out of the
(1)  shall not be greater than $50 per megawatt hour on
(2)  shall not be greater than $30 per megawatt hour on
or before January 1, 2037. [The commission shall require the
independent organization certified under Section 39.151 for the
(1)  enforce the requirements of Subsection (b) by
imposing financial penalties, as determined by the commission, for
failing to comply with the performance requirements described by
(2)  provide financial incentives, as determined by the
commission, for exceeding the performance requirements described
(d)  The real-time settlement price for electric generation
facilities that opt-out of the reliability standard established
under Subsection (b) may not fall below $0 per megawatt hour.
(e)  An electric generation facility that opts-out of the
reliability standard under Subsection (b) and sells power when the
real-time settlement price is between $0 per megawatt hour and the
cap calculated under Subsection (c) shall receive the real-time
settlement price.  At no time shall an electric generation facility
that opts-out of the reliability standard under Subsection (b)
receive more than the cap calculated under Subsection (c).
(f)  Any revenue from power sold in the ERCOT market subject
to the settlement price cap calculated under Subsection (c) shall
be subtracted from the total generation billed to all Retail
Electric Providers for each period the power is sold.
(g)  The commission shall establish set dates for each owner
or operator of an electric generation facility or pooled generation
facility to elect to meet the reliability standard established
under Subsection (b), which shall not be more often than four times
(h)  Electric generation facilities that elect to meet the
reliability standard established under Subsection (b) by pooling
must meet the reliability standard based upon the combined
nameplate capacity of the pooled generation sites.  Pooled
generation facilities must bid into the market as a single
(i)  Any owner or operator of an electric generation facility
or pooled generation facility that made the election under
Subsection (g), but failed to meet the reliability standard
established under Subsection (b) shall pay the difference between
the replacement power to cover the load lost and the offered price
of the undelivered load on the real-time market.  Should the offered
price of the generation facility or pooled generation facility be
greater than 80 percent of the high system-wide offer cap, any
failure to meet the reliability standard shall be calculated at 80
percent of the high system-wide offer cap instead of the offered
(j)  A penalty assessed against an owner or operator of an
electric generation facility or pooled generation facility under
Subsection (i) shall be subtracted from the total generation billed
to all Retail Electric Providers for each period such penalty is
(l)[(d)]  The independent organization certified under
Section 39.151 for the ERCOT power region may not impose penalties
(1)  for resource unavailability due to planned
maintenance outages or transmission outages; or
(2)  on resources that are already subject to
performance obligations during the highest reliability risk hours
under the day-ahead market rules or other ancillary or reliability
services established by the commission or the independent
(3)  during hours outside a baseline established by the
commission that includes morning and evening ramping periods.]
SECTION 2.  This Act takes effect September 1, 2025.