With demand expected to soar, the Legislature passed bills aimed at boosting supply and making the grid more reliable. Bills to impose more regulations on renewables died.
The Texas Legislature only partially got what it wanted from its plans to help the state meet its growing energy demands.
Lawmakers passed bills that give the state more control over the electricity that flows through Texas, fund power generation projects and create an office to advance the state’s nuclear energy interests.
But experts said the 140-day session was also defined by the bills that didn’t survive — namely, all legislation meant to hamstring renewable energy.
“I think (the legislative session) ended in a decent place, particularly considering how it might have gone,“ said Doug Lewin, author of the Texas Power and Energy Newsletter. “I think the proposals that would have been most damaging to the Texas economy, consumers, and reliability … did not make it through.”
Texas faces a soaring demand for energy, driven predominantly by data centers and new petrochemical facilities. The expected spike in demand will require the Electric Reliability Council of Texas, the state’s main grid manager, to deliver nearly double the amount of electricity in six years.
Throughout the session, lawmakers stressed that their intent was to craft legislation that will help ERCOT keep the lights on for everyday ratepayers during emergencies or demand spikes.
More oversight over energy market
Senate Bill 6, by state Senator Phil King, R-Weatherford, gives ERCOT the authority to shut off power to facilities that use at least 75 megawatts of electricity, such as industrial factories and data centers, during an emergency, which the bill defines as extreme weather events that drive up demand. ERCOT must first deploy every emergency response at its disposal, issue a 24-hour warning and set the rules under which this would occur.
The goal is to have as much electricity available to the grid as possible when demand spikes.
“I think that’s a manageable risk for anybody who really wants to make sure their power is dependable and reliable,” said Pat Wood, chief executive officer of Hunt Energy Network and former chair of the Public Utility Commission. “That’s a pretty good balancing point, because nobody’s rights are ever absolute in a system like this, where we’re all interconnected with each other.”
Under the bill, very large energy users hoping to connect to the state grid must disclose whether they have similar requests for other projects in Texas, and if the connection is approved, they must pay $100,000 for studies to determine the cost of the infrastructure necessary for the connection. The goal is to give ERCOT a clearer picture of future demand by knowing which projects companies are serious about building.
Funding new power
Legislators also approved more money to encourage construction of power infrastructure including natural gas plants, backup generators and nuclear power.
The Texas Energy Fund, a low-interest loan program aimed at encouraging companies to build more power infrastructure, will receive an additional $5 billion on top of the $5 billion lawmakers approved in 2023. Of that amount, $1.8 billion can be used for strengthening existing backup generators. Renewable energy companies don’t qualify for the program.
Lewin said this money “might be the most impactful thing, honestly, because that puts us on the leading edge of all the states” in promoting smaller energy projects like small power plants and backup generation.
Nuclear power will also get a boost. As part of the state’s budget, a fund dedicated to nuclear power will receive $350 million. The Texas Advanced Nuclear Energy Office, also established by the Legislature, will administer the money. It will be up to Gov. Greg Abbott to determine the composition of the office.
Anti-renewable bills die
Solar, wind and battery storage account for most of the new energy generation in Texas, according to ERCOT, and Texas is a national leader in renewable energy — a trend lawmakers unsuccessfully tried to reverse.
The most sweeping effort was Senate Bill 819 by Sen. Lois Kolkhorst, R-Brenham, which would have imposed new rules and fees on renewable projects — such as requiring county governments within 25 miles of a new renewable project to hold local hearings on each project before the state Public Utility Commission could consider a permit application.
The bill also would have required renewable projects be located at least 100 feet from a property line and 200 feet from any habitable structure.
Senate Bill 388 by King would have required that at least half of the state grid’s supply come from so-called dispatchable power, or energy that can be turned on and off at will. That excludes wind and solar, which can only produce energy when the wind blows or the sun shines, and the bill would have imposed fees on renewable companies to help the state reach that goal.
Another bill, sponsored by state Sen. Kevin Sparks, R-Midland, would have required renewable energy facilities to have backup natural gas generation, a proposal that was broadly opposed by natural gas trade and renewable energy groups.
“Cooler heads prevailed in blocking some of the most extreme anti-energy proposals, as most legislators recognize that Texas can’t afford to forfeit any source of affordable, predictable power when every megawatt is needed to meet growing demand,” said Judd Messer, the Texas vice president of Advanced Power Alliance, a trade group.
He added the bills posed a threat “to the deeply held Texas principles of free markets, limited government, and private property rights.”
Source: Carlos Nogueras Ramos, The Texas Tribune
Photo Credit: A pump jack operates near a gas turbine power plant in the Permian Basin oil field outside of Odessa on Feb. 18, 2025. Credit: REUTERS/Eli Hartman
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