As the 88th Texas Legislature barrels towards its sine die Memorial Day, lawmakers are apparently trying to ensure gas-fired generators are protected from outside market forces and punish renewable resources by placing nearly insurmountable hurdles in front of them.

SB6, which would create a “Texas energy insurance program” by funding 10 GW of gas generation for use during emergency conditions, has been buried in the House of Representatives since mid-April. However, legislators have moved other legislation that threatens one of the world’s largest renewable energy segments. (See Texas Senate Lays out Changes to ERCOT Market.)

On Wednesday night, the Senate added amendments to the Public Utility Commission’s sunset bill (HB1500) that target the renewable energy sector.

The Senate’s Business and Commerce Committee had already added language this week that would require generators interconnected to ERCOT after Dec. 1, 2026, to be able to produce power for at least 15 hours when called upon. Another edit would allocate ancillary services’ and reliability services’ costs to all resources in proportion to their unreliability contributions.

To that, senators added nearly two dozen more amendments, including a firming requirement directed at renewables. One amendment included SB1287, which would raise interconnection costs for renewables by using a postage stamp method that includes the resource’s “reliability impact” to the grid. Another (SB624) would increase the paperwork necessary for renewable developers to secure permits for their facilities.

Conservative Texans for Energy Innovation called SB624 an “industry killer” in a statement, saying it would “impose an unprecedented permitting process on clean energy projects.”

“What a mess of a bill HB1500 has become,” tweeted Stoic Energy’s Doug Lewin, who advocates for energy efficiency and demand response. “It’s a Frankenstein’s monster at this point.”

The Senate unanimously approved the amended bill.

The chamber had already revised and approved HB5 earlier Wednesday. The tax abatement legislation excludes renewable resources, which had been a part of the previous program, from obtaining school property tax breaks for their new facilities but does include fossil-fuel-fired power plants. Renewable resources are already facing a loss of the state’s renewable portfolio standards.

Another bill (SB2627) would create a state-funded, low-interest loan program offering billions of dollars to companies that want to construct gas-fueled power plants; bonuses would be paid if the plants are completed and connected to the ERCOT grid by 2029. It has been amended in the House but must be reconciled in the Senate. Gov. Greg Abbott is said to be “intrigued” by the bill, which would require a constitutional amendment.

Energy consultant Alison Silverstein, a former staffer with the PUC and FERC, noted the magnitude of “thermal plant giveaways” have been reduced, with several bills dead or modified in the House.

“Broadly, however, thermal generators will be the biggest winners from this session,” she told RTO Insider. “Texas energy consumers are likely the biggest losers from this session. If the anti-renewables measures survive, that will raise electricity costs statewide.”

PCM and DRRS

Those costs could also increase with several measures related to the PUC’s proposed performance credit mechanism (PCM), designed to incent new thermal generation and keep existing dispatchable resources online. The PCM would allow generators to sell performance credits in exchange for promising to be available during tight operating conditions. Load-responsible entities would be required to buy the credits, with those costs likely passed on to businesses and residential customers. (See Texas PUC Submits Reliability Plan to Legislature.)

The House on Monday approved SB7, limiting the PCM’s cost to $1 billion a year, net of savings in the energy and ancillary services markets. The Senate’s approved version capped the credits’ costs at $500 million.

The Senate version also excluded energy storage from selling credits, though ERCOT has told the PUC it considers batteries to be dispatchable. The House version doesn’t. The differences will have to be either accepted or reconciled when it goes back to the Senate.

SB7 also includes a proposed dispatchable reliability reserve service (DRRS), a day-ahead reserve product to be deployed when ERCOT uncertainty associated with intermittent resources and load increases. An Austin-based research firm has estimated DRRS will increase market costs by about $4 billion annually.

The new reserve service can also be found in HB1500’s amendments. Both bills would mandate DRRS be implemented by the end of 2024.

“The PCM is a costly, unnecessary tool that will allow the PUC to guarantee profits for generators on the back of Texas customers. This is a regulated approach, but without the customer protections and spending oversight that go hand-in-hand with regulation,” Texas Association of Manufacturers CEO Tony Bennett said in a statement. “This unproven model has the potential to add billions to the market, and without a firm cost cap, it threatens to significantly increase prices on all consumers without meaningfully improving reliability. Future job growth, company location and investment decisions depend upon the Legislature charting the right course before the legislative session ends.”

Bennett was speaking for several other consumer groups who agree that without a cap, the PCM program will hurt their bottom lines. Most of the state’s power generators, including NRG Energy, Calpine and Vistra, support the commission’s version of the PCM and a higher limit.

“This bill will increase costs to our constituents, and it will not increase reliability,” Rep. Chris Turner (D) said during the House State Affairs Committee’s discussion. “That’s the truth. It’ll cost our state, the businesses in our state and our constituents; most importantly, it will cost them money without increasing reliability. And that’s the worst of both worlds.”

Already, several observers have pointed to clean energy investments that are being made in neighboring states and worry that Texas could be left behind. Enel North America announced Monday it will build a $1 billion solar panel manufacturing plant in Oklahoma. To the east, Louisiana has gone all in on developing carbon storage sites, offshore wind farms and clean hydrogen facilities.

“Access to clean, affordable power is an economic development tool,” Advanced Power Alliance CEO Jeffrey Clark said. “Availability makes states more attractive for investment. Emerging industries like carbon capture, synthetic fuels, hydrogen and LNG exports are going to rely on clean power to cut costs.”

Not much time is left: Bills that go to conference committee to reconcile differences must be approved by Sunday in both chambers.

“It’s all up in the air. More to come, but not sure when,” Clark said, summing up the work that lies ahead.

The Legislature’s frantic closing days were highlighted by Attorney General Ken Paxton’s demand that House Speaker Dade Phelan resign from his position after video emerged of him slurring his words during a late-night session. Within hours, the House announced its ethics panel has been investigating a $3.3 million settlement Paxton reached with four former employees who accused him of corruption; the investigators detailed their findings Wednesday during a public committee hearing.

On Thursday, the committee recommended that Paxton be impeached. The House could vote on the recommendation as soon as tomorrow.

Paxton has been under indictment since 2015 for securities fraud. The U.S. Justice Department is also conducting a corruption investigation into the embattled AG that began in 2020. Despite the allegations, Paxton has been re-elected twice since 2015.