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Texas Large Load Bill Would Require Minimum Transmission Charge For Customers Served Behind-the-Meter
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A Texas bill (SB 6) filed today, authored by Sen. Phil King and Sen. Charles Schwertner, addresses several policies concerning large electricity loads, including minimum transmission charges and the availability of generation co-located with load to serve ERCOT during grid emergencies
SB 6 would require that the Texas PUC shall, "implement minimum rates that require all retail customers in that
region [ERCOT] served behind-the-meter to pay retail transmission charges
based on a percentage of the customer's non-coincident peak demand
from the utility system as identified in the customer's service
agreement."
Concerning the co-location of retail customers with an "existing" generation source, SB 6 provides, among other things, that a power generation company must receive PUC approval before implementing a new
net metering arrangement between a generating unit and an
unaffiliated retail customer if the retail customer's demand exceeds 10% of the unit's capacity, and if the PGC has not proposed to build an equal amount of replacement capacity (under the bill, qualified replacement capacity for dispatchable thermal generation may only be dispatchable thermal generation)
SB 6 would allow the PUC to impose "reasonable conditions" on any such co-located load arrangement, including requirements that:
(1) the behind-the-meter load ramp down during
certain events;
(2) the generation re-enter energy markets in the
ERCOT power region during certain events; and
(3) the generation resource will be held liable
for stranded or underutilized transmission assets resulting from
the behind-the-meter operation.
SB 6 would require the PUC and ERCOT to develop a reliability service that would competitively procure
demand reductions from large load customers in advance of emergency conditions. Such reductions would be required to last through the duration of the emergency or until the load can safely be resumed. Load that is price responsive may not be entered into such a program, and the load may not be participating in another reliability or A/S program
SB 6 would also require the PUC to develop standards for interconnecting large loads, "in a manner designed to support business
development in this state while minimizing the potential for
stranded infrastructure costs."
The standards would apply to loads above a threshold set by the PUC. SB 6 would initially set the threshold at 75 MW, but would allow the PUC to lower the threshold if such lower threshold is required to achieve the bill's stated objectives
SB 6 would authorize ERCOT to require that large loads deploy any customer on-site backup generation during load shed conditions
The standards to be developed by the PUC for large loads shall include financial commitment requirements, though SB 6 is silent on establishing the amount of such commitments
SB6 would also require the PUC to study whether 4CP transmission cost allocation remains appropriate, and whether alternative methodologies should be considered
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Would Authorize PUC To Require That Co-located Generation Be Available To ERCOT In Emergencies
Requires Study Of 4CP Cost Allocation
February 12, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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