Frame

Grid Monitor AI
05/22/2025

The chair introduced HB3069 and invited Senator Schwertner to explain the bill.
The bill addresses expensive transmission congestion costs in the ERCOT system, estimated at nearly $2 billion last year.
It focuses on long-term planning for transmission infrastructure in the ERCOT region.
Proposes a supplemental multi-decade planning criteria for granting certificates for transmission projects.
Criteria include evaluating potential customer savings using discount rates, hurdle rates, and scenario planning.
The PUC findings would be part of the criteria in decision-making for certificates.
HB3069 aims to ensure long-term cost savings for consumers, improve grid reliability, and support Texas’s growing energy needs.
Three individuals were called for public testimony: Eddie Lucio, Katie Coleman, and Cyrus Reed.

Eddie Lucio III represents the Texas Transmission Project, a coalition focused on transmission components and grid limitations.
Acknowledgment of the stakeholders, including Miss Coleman, for their contributions in refining the bill.
The bill aims to create a consensus by asking the Public Utility Commission to adopt alternative methods for issuing certificates.
Out of 24 recently issued certificates, only two have been through economic planning.
The bill seeks to provide a more robust alternative to the current system with discount factors and checks to avoid overemphasizing benefits.
The focus is on making informed decisions regarding significant investments in necessary but costly state infrastructure.

Cyrus Reed from the Lone Star Chapter of the Sierra Club discussed HB3069.
Acknowledged the bill as a "great compromise", balancing transmission needs with consumer costs.
Referred to Senator Hancock's previous bill, SB1281, which implemented an economic test for building transmission.
Mentioned that the economic test is rarely used and targets savings over a three-year period.
HB3069 introduces an alternative process to evaluate long-term benefits of transmission projects.
Stressed that the bill requires a thorough process through ERCOT and PUC stakeholder engagement before implementation.
The goal is to find projects that are economic and save consumers money, thus reducing congestion and costs on the ERCOT system.
Expressed support for the compromise bill.

Katie Coleman represented the Texas Association of Manufacturers and testified neutrally on HB3069.
The Association negotiated the bill in the House and is comfortable with it.
Previous concerns about the bill focused on evaluating future savings or benefits of transmission projects due to reliance on uncertain assumptions.
The current version of the bill is neutral, allowing the PUC to determine discount rates and hurdle rates to assure customer benefits.
Key factors in the long-term planning analysis include forecasting gas prices and generation locations, which are uncertain.
The bill mandates the commission to evaluate whether benefits should exceed costs by a certain margin or if a discount rate should be applied to assumed benefits.
Coleman concluded the testimony and opened the floor for questions.

The bill addresses transmission costs over multiple decades, focusing on savings from relieving congestion versus building costs.
The directive requires the PUC to establish a supplemental multi-decade transmission planning criterion.
The previous congestion cost savings test is not included, but the bill supports long-term evaluation of transmission projects when approved by a CCN.
Comparison between the previous test, which looked at the immediate few years after a project's implementation, and the new bill which evaluates long-term projections.
The longer-term test will complement, not replace, the current near-term evaluation, providing more information for decision-making.
The PUC will have the discretion to approve projects based on various methodologies.
There will be a contested case at the PUC for need evaluation, allowing stakeholders to contest assumptions used in the tests.

Senator Menéndez highlights the dramatic increase in congestion costs.
Congestion costs nationwide jumped 56% in 2022, from $13 billion to $20 billion.
Congestion costs occur when transmission capacity is insufficient to deliver low-cost energy.
Manufacturers and consumers desire the lowest cost energy.
Discussion on the importance of building infrastructure that is beneficial long-term.
By 2031, Texas's energy load is expected to nearly double.
Eddie Lucio II states that the current scarcity mindset in determining reliability is not sufficient for future demands.
Texas is projected to become the seventh-largest economy in the world, necessitating future-focused infrastructure building.
Acknowledgement of the need to maintain low costs for consumers while building necessary infrastructure.
Public testimony on HB3069 has concluded and the bill remains pending.