Relating to the interconnection and operation of large loads.

89(R) HB 3970 - Engrossed version - Bill Text

By: Darby

H.B. No. 3970

A BILL TO BE ENTITLED

AN ACT

relating to the interconnection and operation of large loads.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter D, Chapter 39, Utilities Code, is

amended by adding Section 39.169 to read as follows:

Sec.

39.169.

LARGE LOAD INTERCONNECTION. (a) In this

section:

(1)

"Behind-the-meter generation" means a generation

facility on the retail customer's side of the meter capable of

serving the full load requirement of the retail customer.

(2)

"Flexible load" means a large load operated by a

retail customer who is obligated by contract or agreement in the

ERCOT market to reduce the load or power the load exclusively with

back-up generation:

(A)

at the direction of the independent

organization certified under Section 39.151 for the ERCOT power

region; or

(B)

as required to protect the integrity of the

ERCOT grid.

(b)

The commission by rule shall establish a program to

provide an expedited process for the interconnection of large

loads.

The program must require the interconnecting electric

cooperative, municipally owned utility, or transmission and

distribution utility and the independent organization certified

under Section 39.151 for the ERCOT power region to give priority in

the interconnection queue to a large load for which a retail

customer has received approval for expedited processing over any

other large loads that have not entered into a contractual

agreement with the electric utility, electric cooperative, or

municipally owned utility regarding the provision of electric

service.

If applicable, the generation interconnection

application for a generation facility associated with the large

load must be processed in parallel with the large load.

(c)

The program must require a large load to qualify for

expedited interconnection processing by bringing in-service, not

later than the 180th day after the interconnection date,

behind-the-meter generation that is:

(1)

registered with the independent organization

certified under Section 39.151 for the ERCOT power region; and

(2)

capable of serving the full load requirement of

the customer.

(d)

As an alternative to the requirements of Subsection (c),

a large load may qualify for expedited interconnection processing,

if the load is a facility with an aggregated peak demand at a single

site of more than 75 megawatts, by:

(1)

providing to the interconnecting electric

cooperative, municipally owned utility, or transmission and

distribution utility all data regarding, and posting all required

financial security for, the load; and

(2)

being subject to a binding commitment with the

independent organization certified under Section 39.151 for the

ERCOT power region to establish the load as a flexible load for a

minimum period established by the commission, which must be at

least 10 years.

(e)

A large load that qualifies for expedited

interconnection processing may choose:

(1)

if authorized by the independent organization

certified under Section 39.151 for the ERCOT power region and the

relevant electric cooperative, municipally owned utility, or

transmission and distribution utility, to contract with a vendor

approved by the relevant electric cooperative, municipally owned

utility, or transmission and distribution utility or by the

independent organization to perform all studies required by the

relevant electric cooperative, municipally owned utility, or

transmission and distribution utility before the approval of the

interconnection application; and

(2)

if authorized by the relevant electric

cooperative, municipally owned utility, or transmission and

distribution utility:

(A)

to procure equipment required for the

interconnection in accordance with technical specifications

provided by the relevant electric cooperative, municipally owned

utility, or transmission and distribution utility; and

(B)

to construct interconnection facilities in

accordance with technical and other requirements of the relevant

electric cooperative, municipally owned utility, or transmission

and distribution utility.

(f)

The program may provide that studies required by an

electric cooperative, municipally owned utility, or transmission

and distribution utility before the approval of an interconnection

application for a flexible load may evaluate the load as non-firm.

(g)

Demand reductions from flexible loads that receive

expedited processing and are removed from the system through the

utilization of behind-the-meter generation during an energy

emergency alert must be counted toward any obligation of the

electric cooperative, municipally owned utility, or transmission

and distribution utility to shed load.

(h)

The independent organization certified under Section

39.151 for the ERCOT power region shall consider action taken under

this section as a reliability deployment when calculating any price

adjustments for reliability deployments.

(i)

The commission shall establish financial penalties the

commission may impose on an owner or operator of a large load that

is approved for expedited interconnection processing but fails to

reduce the load or power the load with back-up generation as

directed by the independent organization certified under Section

39.151 for the ERCOT power region.

SECTION 2. This Act takes effect September 1, 2025.