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On May 7, 2026 the Public Utilities Commission of Texas issued an order adopting new 16 TAC 25.513 relating to the Texas Energy Fund – Texas Backup Power Package Program. (See remainder of the Order -pages 101-147 – here.)

The commission adopts this rule with changes to the proposed rule as published in the January 2, 2026 issue of the Texas Register.

New §25.513 implements Public Utility Regulatory Act (Pt-JRA) §§34.0204.34.0205. and 35.005(g). enacted as part of Senate Bill (SB) 2627 during the 88th Texas Legislature (R.S.). The new rule will establish procedures for applying for a grant or loan for design, procurement, installation. and operation of Texas Backup Power Packages (7BI~Ps) terms for an applicant to request a grant or loan. as well as conditions Linder which a TBPP loan may be forgiven.

The adopted rule excludes TBPPs that source power from electric school bus batteries (liSBs) because this category of TBPP assets was expressly excluded from consideration in the notice related to the proposed rule. Excluding ESBs at the adoption stage is therefore consistent with that prior notice. Accordingly. the commission defers consideration of this provision to a future date.

In the Order, the “commission declines to impose a mandatory cost-share requirement as a condition of eligibility for a loan or grant under the TBPP program to keep the program accessible to different types of critical facilities. The commission notes that, for a given facility, certain TBPP project costs may not be covered, may exceed the applicable grant cap, fall outside eligible cost categories, or otherwise not qualify for a forgivable loan. In such circumstances, the awardee may be responsible to cover those costs.

The commission also declines to adopt a tiered, conditional, or applicant type based cost share framework. Maintaining a uniform approach without the required cost-share based on applicant type best balances administrative simplicity and program accessibility for all types of applicants.”

“The commission notes the comments submitted by Generac, SUN, TAEBA, TEVA, Highland, NCTCOG, and Oncor regarding the use of ESBs as backup power resources, operational requirements, and consideration for potential ESB interconnection. The commission anticipates issuing a separate proposal for publication to address ESB participation in TBPP program and related requirements, with the intent of adopting amendments to the TBPP rule in a subsequent proceeding.”

“As discussed in the preamble above, the adopted rule excludes TBPPs that source power from ESBs because this category of TBPP assets was not included in the notice related to the proposed rule.”

“The commission clarifies that PURA §34.0201 requires that a TBPP functions exclusively as a standalone, behind-the-meter backup power resource for its host critical facility. Accordingly, TBPPs must be designed to operate only in an islanded mode and must not export power to the electric grid,”

The order also concludes that TBPP may not be used for, “the wholesale or retail sale of electric energy, ancillary services, emergency response service, or other reliability service in which the provider receives compensation in Texas,”

“TBPPs must not participate in activities other than serving the critical facility during reliability or adequacy events.”

“The commission clarifies that TBPPs are not permitted to participate in wholesale or retail electric energy markets; participate in ERCOT or another ISO’s ancillary service, ERS programs, or other reliability services; the Aggregated Distributed Energy Resource (ADER) program; solar buyback, or peak load reduction program that results in grid interaction; or participate in any demand response program, including as a Controllable Load Resource, administered by an ISO, retail electric provider, electric utility, or other entity,”

Read entire order at order links provided in first paragraph of story.