Relating to the regulation of emissions by the Texas Commission on Environmental Quality during an event affecting electric demand or grid reliability.

BILL ANALYSIS

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Currently, during emergency conditions, the Electric Reliability Council of Texas (ERCOT) will request that the Texas Commission on Environmental Quality (TCEQ) waive its enforcement discretion of a generation facility's permitted emissions limits. If TCEQ grants this request, then ERCOT will provide prompt notice to its market participants of TCEQ's determination to waive enforcement. S.B. 2321 memorializes this practice and makes clear that an enforcement waiver extends to emissions from back-up generation facilities.

S.B. 2321 requires TCEQ, upon a request from ERCOT, to exercise its discretion to waive enforcement of emissions limits from generation facilities and on-site back-up generation facilities during emergency conditions.

The bill seeks to provide regulatory certainty to generators and large loads with back-up generation units by automating the enforcement discretion process between ERCOT and TCEQ to maximize generation availability. Additionally, S.B. 2321 signals the state's support for emergency operation plans.

As proposed, S.B. 2321 amends current law relating to the regulation of emissions by the Texas Commission on Environmental Quality during an event affecting electric demand or grid reliability.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Subchapter D, Chapter 382, Health and Safety Code, by adding Section 382.086, as follows:

Sec. 382.086. ENFORCEMENT DURING ELECTRIC DEMAND AND RELIABILITY EVENT. (a) Requires the Texas Commission on Environmental Quality (TCEQ) to exercise TCEQ's enforcement discretion to waive enforcement for emissions from generation facilities and on-site backup generation facilities in the Electric Reliability Council of Texas (ERCOT) power region during a period requested by the independent organization certified under Section 39.151 (Essential Organizations), Utilities Code, for the ERCOT power region if the independent organization notifies TCEQ that electric demand and reliability needs in the region cannot be met or that a local electric grid reliability issue in the region exists during that period.

(b) Provides that after the independent organization submits a notification to TCEQ under Subsection (a):

(1) the independent organization is required to notify market participants in the ERCOT power region of the period in the notification during which limits or standards described by Subdivision (2) do not apply to the operation of a generation facility or on-site backup generation facility in the ERCOT power region; and

(2) notwithstanding any other law and subject to Subsection (d), TCEQ is prohibited from enforcing a rule or standard, including an emissions limit or standard, hours of operation limit, or any similar operational limit, against the owner or operator of a generation facility or on-site backup generation facility for the period in the notification.

(c) Requires the owner or operator of a generation facility or on-site backup generation facility eligible for waived enforcement during the period in a notification submitted under Subsection (a) to:

(1) take commercially reasonable steps to operate environmental controls and minimize excess emissions during the period;

(2) maintain operational records during the period; and

(3) submit proper documentation of the facility's operational records to TCEQ, including certain information.

(d) Prohibits TCEQ from considering an exceedance of an emissions limit or standard during a period for which a notification is submitted under Subsection (a) as the basis for an enforcement action against the owner or operator of a generation facility or on-site backup generation facility unless the owner or operator fails to submit the documentation required by Subsection (c)(3).

(e) Authorizes the owner or operator of a generation facility or an on-site backup generation facility eligible for waived enforcement during the period in a notification submitted under Subsection (a) to report any exceedance of an emissions limit or standard as an event that did not result in the emission of at least a reportable quantity of unauthorized emissions, in accordance with TCEQ regulations and permit requirements.

SECTION 2. Effective date: September 1, 2025.