Bill > HB3374

This bill addresses market distortions in electricity pricing within the Electric Reliability Council of Texas (ERCOT) power region caused by federal tax credits, specifically those provided under Section 45 of the U.S. Tax Code. The legislation requires the Public Utility Commission and ERCOT to develop new rules and operating procedures that eliminate or compensate for pricing distortions created by electricity generators receiving these tax credits. Specifically, the bill mandates that the additional costs imposed on the electrical system by tax credit-eligible electricity sales—including expenses related to maintaining sufficient capacity to meet summer peak demand—must be directly attributed to and paid by the parties responsible for creating those costs. Additionally, the bill instructs regulators to remove existing rules that attempt to adjust electricity prices based on probabilistic reserve levels and the potential economic value of lost electrical load. The new regulations will take effect on September 1, 2025, giving stakeholders time to prepare for the changes in electricity market management.

Government Affairs

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB3374