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Texas PUC staff seek seeks consideration and adoption of new rule at the December 12, 2025, Open Meeting of its  memorandum recommend adoption order of new 16 Texas Administrative Code (TAC) §25.65, relating to Filming Program Requirements for Electric Generation Facilities in the ERCOT Region.  

The purpose of the new rule is to implement House Bill 1500, as enacted during the Texas 88th Legislature, Regular Session. Among other things, the Commission staff’s recommended adoption order establishes performance requirements for electric generation facilities in the ERCOT region. The recommended adoption order also establishes a framework for ERCOT to impose financial penalties on electric generation facilities that fail to comply with the requirements and provide financial incentives to electric generation facilities that exceed the requirements.

The commission received written comments on the proposed section from Advanced Power Alliance and American Clean Power Association (APA and ACP); Electric Reliability Council of Texas, Inc. (ERCOT); Eolian, LP; esVolta, LP; Grid Resilience in Texas (GRIT); Hunt Energy Network, LLC (HEAT); Lone Star Chapter of the Sierra Club (Sierra Club); Lone Star Energy Storage Alliance (LESA); Lower Colorado River Authority (LCRA); NextEra Energy Resources, LLC (NextEra); NRG Energy, Inc. (NRG); Octopus Energy LLC (Octopus Energy); Office of Public Utility Counsel (OPUC); Potomac Economics (Potomac); Solar Energy Industries Association (SEA); Southern Power Company (Southern Power); Tesla, Inc. (Tesla); Texas Advanced Energy Business Alliance (TAEBA); Texas Competitive Power Advocates (TCPA); Texas Electric Cooperatives, Inc. (TEC); Texas Energy Buyers Alliance (TEBA); Texas Industrial Energy Consumers (TIEC); Texas Oil and Gas Association (TXOGA); Texas Public Policy Foundation (TPPF); Texas Public Power Association (TPPA); Texas Solar + Storage Association (TSSA); and Vistra Corporate Service Company (Vistra).

In the memo attached to Staff’s recommended order, Staff notes that “the purpose of the new rule is to implement House Bill 1500, as enacted during the Texas 88th Legislature, Regular Session. Commission staff’s recommended adoption order establishes performance requirements for electric generation facilities in the ERCOT region. The recommended adoption order also establishes a framework for ERCOT to impose financial penalties on electric generation facilities that fail to comply with the requirements and provide financial incentives to electric generation facilities that exceed the requirements.”

When PRC falls below 3, 000 MW (similar to criteria for declaration of a Watch)

“The commission agrees with commenters that the triggering threshold for defining a low 20 operation reserve hour should be when PRC falls below 3,000 MW, which is consistent with 21 when ERCOT declares a Watch. However, the commission declines to modify the triggering 22 threshold to be longer than 15 minutes. The commission notes that a Watch is declared when 23 the reserves fall below the 3,000 MW threshold and are expected to remain below that threshold for 30 minutes, not after reserves have been below that level for 30 minutes. A 30- 2-minute triggering threshold would make it possible for ERCOT to declare a Watch without 3 having the triggering threshold met.”

Should the low operation reserve hour be tied to the deployment of or a shortage in aggregate real-time awards relative to the Ancillary Service Plan for ERCOT Contingency Reserve Service (ECRS)?

“The commission agrees with commenters that the low operation reserve hour should not be 10 tied to the deployment of or a shortage in aggregate real-time awards relative to the Ancillary 11 Service Plan for ECRS. Additionally, the commission agrees with TIEC that the performance requirements set forth in the rule should be tied to PRC because the PRC level indicates when the ERCOT market is entering into emergency conditions.”

Portfolio-based compliance

“The commission declines to adopt Eolian, NextEra, TAEBA, TPPA, and Vistra’s recommendation to evaluate compliance, impose financial penalties, and provide financial incentives on a portfolio basis instead of at the resource level. The commission disagrees with Eolian that the reference in PURA §39.1592(b) to the owner or operator’s portfolio means the owner or operator’s overall portfolio. The statute does not use the term “overall” and electric generating facilities make up an owner or operator’s portfolio. Therefore, it is appropriate to evaluate compliance of each electric generating facility in a portfolio and to impose financial penalties and provide financial incentives accordingly. However, the commission modifies the adopted rule to clarify that, for operational and settlement purposes, ERCOT will look to the Qualified Scheduling Entity (QSE) that represents the electric generating facility on behalf of the owner or operator. This approach complies with the statute and aligns with ERCOT’s existing settlement system. Moreover, to comply with the statutory requirements to allow for other resources to satisfy the performance requirements, the commission modifies the adopted rule to make it explicit that an electric generating facility’s performance requirement, either in part or in whole, can be satisfied through a trade arrangement with a firming resource. This can be done at any time prior to the final settlement of the season and will ensure that the owner or operator of an electric generating facility can satisfy the performance requirements with other resources, either within their own portfolio or a portfolio managed by another owner or operator.”

Firming requirement applicability

“The commission adopts APA and ACP, Eolian, NextEra, Sierra Club, and TSSA’s  recommendation to clarify the applicability of the performance requirements. However, the commission disagrees with APA and ACP, Eolian, NextEra, and TSSA’s interpretation of PURA §39.1592 to explicitly exempt existing resources and energy storage resources from being subject to a SAGC for any purpose. PURA §39.1592 explicitly requires an owner or operator of an electric generating facility to demonstrate the ability to operate or be available to operate when called on for dispatch at or above the SAGC. PURA §39.1592 is silent with respect to whether existing resources can provide firming and is also silent with respect to what capacity a resource, including an energy storage resource, may provide to firm an electric generating facility that is subject to the performance requirements.”

Exempt energy storage resources from the application of the SAGC metric

“The commission agrees with APA and ACP, esVolta, LESA, NextEra, SEIA, Southern Power, TEBA, and Tesla that an energy storage resource, as long as it is operating or available to operate, should be able to provide its full capacity to firm an electric generating facility that is subject to the performance requirements set forth in the adopted rule. Therefore, the commission makes conforming changes to adopted §25.65(e)(2)(B). Additionally, because the commission makes this change, esVolta, LESA, and SEIA’s alternative recommendation to account for the availability of an energy storage resource to provide firming is unnecessary.”

Exempt existing resources from the application of the SAGC metric

“The commission disagrees with APA and ACP, NextEra, and Southern Power that existing electric generating facilities that are not required to meet the performance requirements under PURA §39.1592 should be able to provide firming capacity without regard to whether those electric generating facilities exceeded their SAGC. The commission determines that existing electric generating facilities should be able to provide firming to satisfy the requirements of new electric generating facilities only if the existing electric generating facilities themselves would satisfy the performance requirement.”

Expand the types of resources that can provide firming

“The commission adopts TEBA and TIEC’s recommendation to allow load resources to satisfy the performance requirements of electric generating facilities that are subject to the performance requirements. The commission modifies the adopted rule to include load resources and directs ERCOT, as part of its development of protocols to implement the adopted rule, to establish the necessary protocols to validate a load resource’s performance.” 

“The commission agrees with recommendations to include DGRs and DESRs, as these resources are dispatched by SCED and ERCOT has telemetry from these resources. The commission modifies the rule to include DGRs and DESRs and directs ERCOT, as part of the protocol development for this rule, to establish the necessary protocols to validate their performance.” 

“The commission declines to include ADERs at this time. These terms are not currently in the ERCOT protocols.”

“The commission declines to include SODGs on the list of firming resources that can satisfy 18 the performance requirements of electric generating facilities. Validation of the performance of these resources would be difficult or infeasible, as ERCOT does not have telemetry or resource statuses for these resources, and they are not dispatched by SCED.”

Effective date of the proposed rule

“The commission declines to adopt TSSA’s recommendation to specify that the rule is not 5effective until January 1, 2028, because it is unnecessary.”

Staff Recommendation Order Re: New §25.65 – Pages 1-100).
Staff Recommend Order – Pages 101-116

Project 58198
(Rulemaking To Implement Firming Reliability Requirements For Electric Generating Facilities In The ERCOT Region Under PURA §39.1592)