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The Texas Legislature, primarily responding to the unprecedented ERCOT system load shed event during 2021’s Winter Storm Uri, enacted far-reaching system and wholesale market reforms during its 2021 and 2023 legislative sessions. These reforms broadly seek to bolster electric system resilience and reliability while incentivizing, through wholesale market reforms and other out of market actions, dispatchable generation capacity expansion. These reforms principally are adopted in 2021’s Senate Bill 3,[1] and 2023’s House Bill 1500[2] and Senate Bill 2627.[3] These bills (and many others not mentioned here) have required the Public Utility Commission of Texas (“Commission”) to adopt wide-ranging regulations and orders to implement the extensive legislative program. This article surveys and provides citations for all Commission implementation dockets and projects.[4] While the legislative program does require other agencies, primarily ERCOT and the Texas Railroad Commission, to take certain actions, by far the vast majority direct the Commission to take actions and we therefore have focused only on its proceedings.

An asterisk by a proceeding name signifies that it remains an open, active matter as of this article’s date.

Market Design

Project No. 52373Review Of Wholesale Electric Market Design. This is the catchall project for discussing market design changes. Commissioners will file memos suggesting new ideas or proposals, or expressing concerns, on ongoing market design developments.

Project No. 52631Review Of 16 TAC § 25.505. This was the initial adjustment of the systemwide offer cap to $5,000 from $9,000, and require ERCOT to reimburse entities for the actual marginal costs if those exceed the low systemwide offer cap. It resulted in an amendment of 16 TAC § 25.505 in Dec. 2021.

Project No. 53191Reorganization Of 25.505. Among other things, this established a new scarcity pricing mechanism provision in 16 TAC 25.509. This new version of the scarcity pricing mechanism deletes provisions setting the value of lost load (as used in the operating reserve demand curve) at the systemwide offer cap. 

Project No. 53298* – Wholesale Market Design Implementation. This has been a follow up project where the Commission monitors and receives (and provides) updates on a variety of market design implementation issues. So far these have included a variety of issues, such as the Firm Fuel Supply product, reliability standard development, VOLL development, PCM development, and the multi-stage ORDC. One key action within this proceeding is the Commission’s adoption of an order adopting the Performance Credit Mechanism and requiring ERCOT and others to take certain actions to implement it.[5]

Project No. 53493Emergency Response Service. This focuses on development of the legislatively required emergency response service program. This new rule increases the annual budget for ERS to $75 million and allows ERCOT to exceed this amount by up to $25 million for ERS contract term renewals. ERCOT was permitted to access the additional $25 million for ERS contract term renewals immediately upon the effective date. The adopted rule also provides ERCOI greater flexibility to procure ERS for longer amounts of time with a contract term from individual ERS The Commission adopted a final rule, 16 TAC §25.507, in August 2022.

Project No. 54585Emergency Pricing Program. This developed the legislatively required emergency pricing program. The new rule sets an emergency price cap for both energy and ancillary services equal to the low systemwide offer cap and applies whenever the systemwide energy price has been at the high systemwide offer cap for 12 hours in a rolling 24-hour period. It continues for the later of 72 hours after its activation or when ERCOT exists from emergency operations. The Commission adopted this amendment to 16 TAC §25.509 in December 2023.

Project No. 54584* Reliability Standard for the ERCOT Market. This project focuses on developing the legislatively required reliability standard. Staff opened it in early 2023. Since then, stakeholders have filed numerous comments in response to Staff and Commissioner requests. Also, ERCOT has been studying, and reporting on, targeted reliability standard questions involving alternative possible standards. No dates have been set for issuing a proposed rule.

Project No. 55837* – Review of the Value of Lost Load in the ERCOT Market. Discusses the development of a value of lost load (VOLL) study by ERCOT to support creation of a reliability standard as part of the Commission’s market design efforts. ERCOT has filed a VOLL study work plan which is pending comment and approval by the Commission.

Project No. 54244* –Cost Recovery for Service to Distributed Energy Resources (DERs). This involves TDSP recovery of costs associated with interconnection of wholesale distribution level resources. Stakeholders have filed comments and Staff has issued a memo outlining possible rule changes on this issue. The Commission has not indicated when it might consider a formal proposed rule.

Project No. 55948* – Review of Voluntary Mitigation Plan Requirements. HB 1500 adjusts the role of voluntary mitigation plans in the ERCOT wholesale market. Commission Staff have identified the need to open a project to conform Commission rules to the legislation. Staff tentatively plans to submit a draft proposed rule for Commission consideration in mid-January 2024.

Project No. 55955* – Review of Administrative Penalty Authority Related to Voluntary Mitigation Plans. HB 1500 provides the Commission with authority to assess day-for-day administrative penalties in an amount up to $1,000,000 for violations of voluntary mitigation plans. Commission Staff has opened a proceeding to adjust its rules to implement this new penalty authority. No proposed rule has yet been issued. 

Project No. 55000*-Performance Credit Mechanism. Staff recently opened this project, to address details being considered in ERCOT implementation proceedings. It will be an ongoing project.

Project No. 55797*-Dispatchable Reserve Reliability Service. Legislation requires development of a dispatchable reserve reliability service by Dec. 1, 2024. ERCOT initially contemplated making this a subset of non-spin reserve so that it could meet the deadline. This project responds to concerns about whether DRRS should be a subset of non-spin by the deadline, or a standalone service that does not get implemented by the deadline. No actions have occurred so far, although several market participants have submitted comments urging the Commission to require DRRS to be a standalone program even at the expense of missing the statutory deadline (if necessary)

Project No. 55845*-Review of Ancillary Services In the ERCOT Market. The Commission Staff recently opened this project but has not yet indicated its scope or schedule.

Project No. 54335Review of Market Reform Assessment Produced by Energy and Environmental Economics, Inc. (E3). This Project has been a clearinghouse for stakeholder comment on market design reforms proposed by E3 to implement directives from Senate Bill 3 of the 87th Legislature.

Texas Energy Fund

Project No. 54999* – Texas Energy Fund. This is a project for preliminary filings about the Texas Energy Fund implementation, including Staff’s memo scoping potential issues to address in upcoming rulemakings.

Project No. 55812*- Texas Energy Fund Completion Bonus Grant Program. This project is for adoption of a rule implementing the completion bonus provisions of SB 2627 for interconnecting new dispatchable generation capacity by June 2026 or by June 2029. The Commission has issued a proposed rule, and interested parties must submit comments by January 5, 2024.

Project No. 55662*- RFP For A Contractor To Manage Texas Energy Fund Programs. This project will address the Commission’s retention of an outside contractor to manage administration of Texas Energy Fund loans and grants.

Project No. 55273PUC Request For Information Relating To The Texas Energy Fund (SB 2627, 88th Legislature). This project was related to efforts to hire an outside contractor to manage the Fund activities.

Project No. 55826*- Texas Energy Fund In-ERCOT Generation Loan Program. The Commission has issued a proposed rule in this project to implement the SB 2627 provisions for loans for new dispatchable generation capacity within ERCOT. Interested parties must submit comments on the proposed rule by January 5, 2024.

Project No. 55407* Texas Backup Power Package Advisory Committee Rulemaking. This project will cover a future rulemaking to implement those SB 2627 provisions allocating funds to finance backup power packages for grid islanding projects involving public customers. No timetable for proceeding has been announced.

Supply Chain

Project No. 51839Gas Electric Coordination. This project solely resulted in a Staff memo outlining instructions on how to apply for Critical Load Serving Electric Generation. It arose after Winter Storm Uri and has had no activity since May 2021.

Project No. 51888Critical Load Standards and Processes. Staff opened this proceeding in early 2021 but no action has occurred.

Project No. 52345Natural gas critical load. The Commission adopted amendments to 16 TAC §25.22 in this project, by adding end stage renal disease facilities to the list of health facilities prioritized during system restoration following an extended power outage. The amendments also implemented statutory provisions requiring critical natural gas facilities to provide information to electric delivery utilities and for the utilities to incorporate this information into its load-shed and power restoration planning.

Reliability/resilience

Project No. 51840Rulemaking to Establish Weatherization Standards. The Commission adopted new 16 TAC §25.55 to announce new weatherization standards. These apply primarily to electric generation facilities and transmission service providers and required these entities to take initial steps to exhibit greater ability to operate during severe weather. The Commission designated this as Phase I of weatherization, with the adoption of additional standards as part of Phase II in Project No. 53401, described below.

Project No. 51841Review of 16 TAC 25.53 Relating to Electric Service Emergency Operations Plans. The Commission adopted extensive amendments to the existing emergency operations rule, requiring generators and utilities to adopt and implement expanded emergency operations plans.

Project No. 55250 Transmission and Distribution System Resiliency Plans. This project addressed HB 1500 provisions allowing utilities to obtain rate recovery for plans to increase system resilience. The Commission issued a proposed rule in September 2023. Many interested parties submitted comments, but the Commission adopted a final rule in December 2023.

Project No. 55249* – Regional Transmission Reliability Plans. This project implements HB 1500 requirements to adopt regional transmission reliability plans as necessary to mitigate instances of localized transmission insufficiency to serve load. Staff has held one workshop and solicited interested parties to submit relevant studies but has not set a timeline for adopting a rule.

Project No. 53401Electric Weather Preparedness Standards – Phase II. Here, the Commission substantially amended and expanded generation and utility weatherization standards, setting both performance standards and listing specific required actions. The adopted rule amending 16 TAC §25.55, issued in September 2023, also required entities to submit plans and attestations of compliance.

Project No. 51603* – Review of Distributed Energy Resources (DERs). Commission Staff opened this Project to serve as a clearinghouse for development of DER issues, with additional projects opened to initiate specific DER rulemakings,

Project No. 54233* Technical Requirements and Interconnection Processes for Distributed Energy Resources (DERs). This ongoing project considers the process and technical requirements appropriate for distributed energy resources to interconnect to utility distribution systems. The Commission has not adopted a timeline or proposed rule, although the Staff has held two workshops and interested parties have filed numerous comments. 

Project No 53404* Power Restoration Facilities and Energy Storage Resources for Reliability. This project will address TDSP acquisition and deployment of certain facilities to improve and maintain reliability during scarcity events. The Commission has not yet adopted a schedule for the proceeding, although Staff held a workshop in November 2023.

Project No. 55182* – Circuit Segmentation Study. HB 1500 required utilities to study means by which they could segment distribution circuits such that they would gain greater flexibility in designating individual circuits on which they could shed load during EEA 3 events. The Commission ordered, in September 2023, transmission and distribution utilities to conduct such studies for their respective systems. Utilities must submit their studies to the Commission by September 2024, with the Commission to review each by March 15, 2025.

Renewable Portfolio Standards

Project No. 55323Review of Renewable Portfolio Standard. This project implements the HB 1500 provisions that phased out the Texas RPS. The Commission repealed existing 16 TAC §25.173 and adopted a new version implementing these provisions.

Winter Storm Uri-related dockets

Project No. 51812Issues Related to the State of Disaster for the February 2021 Winter Weather Event. This was the initial project covering issues arising during and in the near-term aftermath of Winter Storm Uri. It has been mostly dormant since late 2021.

Docket No.52709/52710Securitization dockets. The Commission considered ERCOT’s applications for securitization financing to cover short paid amounts that certain market participants owed it from ERCOT invoices levied during Winter Storm Uri. The other application was to obtain securitization financing to be made available to load serving entities enabling them to finance payment of certain qualified charges ERCOT levied during the storm. The Commission approved both applications in late 2021.

Docket No. 52321/52322Securitization Compliance dockets. Staff established these to oversee post-judgment implementation of the final securitization docket orders. This included processing of ‘opt out” declarations by qualified large customers who declined refunds of payments made.

Project No. 53710Project To Monitor Distribution And Usage Of PURA Ch. 39, Subchapter N Proceeds. Staff opened this project to coordinate and confirm that load serving entities utilized securitization financing proceeds as required under the final securitization orders.

Other

Project No. 51830Review of Certain Retail Electric Customer Protection Rules. This project resulted in the implementation of SB 3 provisions setting out additional customer protections, including the prohibition of retailers offering wholesale market indexed product offerings. The Commission adopted a final rule in late 2021.

Project No. 52287Power Outage Alert Criteria. SB3 required the Commission to adopt detailed outage alert criteria. It adopted 16 TAC §25.57 in May 2022.

Project No. 52796Review of Market Participant Qualifications and Reporting Requirements 16 TAC §§ 25.105, 25.107, 25.109, 25.485, 25.495. The Commission adopted additional and heightened market participant registration and certification requirements in this rulemaking, in April 2023.

Project No. 55566* – Generation Interconnection Allowance. This rulemaking implements HB1500 provisions requiring the Commission to set a standard allowance cost for generation interconnections. The Commission issued a proposed rule for comment in late November 2023. Interested parties must file comments by January 4, 2024.

Project No. 52301ERCOT Governance and Related Issues. This project establishes the process and schedule for the Commission to consider and either approve or reject ERCOT-adopted standards, as required by HB 1500. Of note is that the Texas Industrial Energy Consumers have sued the Commission in Travis County District Court, contending that this process deprives affected parties of due process and is legally impermissible for other reasons as well. A hearing was held on December 19. 2023 but no decision has been announced. The decision would be subject to further appeal.  

Project No. 52313Review of Statutory Definitions. The Commission adopted a rule to revise certain definitions in the Public Utility Regulatory Act to comport with legislation passed during the 87th Regular Legislative Session and to make additional minor changes. The rule became effective in June 2022.


[1] Act of May 29, 2023, 88th Leg., R.S., ch. 465 (S.B. 2627), Sec. 2 (to be codified at Tex. Util. Code Ann. § 34).

[2] Act of Sept. 1, 2023, 88th Leg., R.S., ch. 410 (H.B. 1500), Sec. 1 (current version at Tex. Util. Code Ann. §§ 12, 13, 15, 35, 36, 37, 38, 39, 40, 52 and at Tex. Water Code § 13).

[3] Tex. S.B. 3, 88th Leg., R.S. (2023).

[4] A Commission “Project” denotes a proceeding in which the Commission undertakes a formal rulemaking or otherwise studies or solicits public feedback concerning issues within its jurisdiction. A “Docket” signifies a proceeding where the Commission adopts an order based on an evidentiary record after a contested case proceeding.

[5] Project No. 53298, Order of January 19, 2023.

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Photo of Chris Reeder Chris Reeder

Chris has been practicing for 28 years, concentrating in the area of administrative law with an emphasis in matters pertaining to energy and natural resources. Chris focuses on a broad scope of regulatory issues, including compliance and enforcement, commercial disputes, market structure, development

Chris has been practicing for 28 years, concentrating in the area of administrative law with an emphasis in matters pertaining to energy and natural resources. Chris focuses on a broad scope of regulatory issues, including compliance and enforcement, commercial disputes, market structure, development related matters, and certification.

Photo of Alaina Zermeno Alaina Zermeno

Prior to joining the firm’s Energy & Natural Resources group, Alaina worked in the Oversight & Enforcement Division (O&E) and in the Legal Division of the Public Utility Commission of Texas (PUCT), representing PUCT before the State Office of Administrative Hearings (SOAH) in…

Prior to joining the firm’s Energy & Natural Resources group, Alaina worked in the Oversight & Enforcement Division (O&E) and in the Legal Division of the Public Utility Commission of Texas (PUCT), representing PUCT before the State Office of Administrative Hearings (SOAH) in various matters, including enforcement, as well as in hearings before PUCT administrative law judges. As part of her O&E role, she initiated Commission investigations into regulated entities that violated statute and Commission rules. She also worked in tandem with the Attorney General’s office by referring violations for civil enforcement and serving as a resource for O&E-referred matters. Clients value Alaina’s unique experience and knowledge of regulatory matters as she guides them in navigating permits, power purchase agreements, and shared utility agreements within and beyond Texas.

Photo of Michael Blackwell Michael Blackwell

Michael is focused on helping clients make the most of structural changes in the energy industry. Michael counsels clients on the rights and obligations of participants in organized electricity markets. With a background working as in house counsel for a Regional Transmission Organization

Michael is focused on helping clients make the most of structural changes in the energy industry. Michael counsels clients on the rights and obligations of participants in organized electricity markets. With a background working as in house counsel for a Regional Transmission Organization (RTO) and a power trading firm, Michael is equipped to advise industry clients on numerous aspects of regulatory, financial, and transactional issues affecting the development and optimization of generation and transmission assets.