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Impact of 88th Legislative Session on Oil, Gas and Renewables in Texas
Impact of 88th Legislative Session on Oil, Gas and Renewables in Texas

The 88th regular session of the Texas Legislature focused on ensuring the reliability of the Texas grid and favoring “dispatchable generation” over “non-dispatchable generation.” Several proposed bills aimed to prioritize fossil fuel-based generation, such as coal and natural gas, over wind and solar power. However, some of these bills did not pass, providing relief for the renewables industry.

Among the bills that did pass, HB1500 reauthorized the Public Utility Commission of Texas (PUC) and introduced provisions related to the Performance Credit Mechanism (PCM), ancillary services, generation facility requirements, and transmission line costs. These provisions generally favor dispatchable facilities and may pose challenges for wind and solar power.

SB2627, which replaced SB6, established a fund of up to $7.2 billion to support the construction, maintenance, and modernization of dispatchable-electric-generating facilities. This fund excludes non-dispatchable generation, such as solar and wind, from eligibility.

HB5 replaced the expired Chapter 313 program and introduced a similar tax incentive scheme for eligible projects. However, non-dispatchable-electric-generation facilities and electric energy storage facilities are excluded from this program.

SB28 and the accompanying Senate Joint Resolution 75 established a water supply fund to finance water projects and upgrade water infrastructure. This is expected to have an impact on the oil and gas industry, which can find beneficial uses for produced water.

Several bills that could have significantly impacted the renewables industry did not pass. SB624 proposed stringent permitting requirements for renewable energy facilities, while SB6 aimed to establish a Texas Energy Insurance Program. SB7 intended to shift ancillary services costs to non-dispatchable resources, and SB2015 set a goal for dispatchable generation. SB1287 proposed changes to the allocation of grid interconnection costs.

Overall, the bills passed during the session indicate a focus on grid reliability and the importance of traditional oil and gas sectors. However, renewables still have a significant presence in Texas, and the state continues to lead in wind and solar power generation. The impact of the passed bills on the energy industry will become clearer as they become effective, and developers and industry stakeholders are advised to stay updated on regulatory compliance and project viability.


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