Substitute Senate Bill 7 was debated on 3/23/23 in the Texas Senate Committee on Business & Commerce. The bill, introduced by Senators Schwertner and King, would i) create a Firming Requirement including the establishment of a methodology for cost determination and allocation on a non-discriminatory basis with respect to resource type and ii) establish the Dispatchable Reliability Reserve Service or DRRS.

There were numerous witnesses commenting on or were in support or opposition of the bill. Of note, #CoreyAmthor of #EnchantedRockEnergy commented that as currently written, DRRS does not include distributed energy resources or DERs as a qualified resource. Amthor also pointed out that the ERCOT requirement of a DER asset being on a non-curtailable circuit in order to provide Ancillary Services was problematic, since utilities almost never guarantee that a circuit is non-curtailable. He suggested new rules for participation of DERs as providers of Ancillary Services.

Pablo Vegas of ERCOT and Carrie Bivins of Potomac Institute, the Independent Market Monitor, also spoke on SB7 and fielded numerous questions from the Committee members. Mr. Vegas pointed out that it typically takes 3 years to create and ready a new Ancillary Service in ERCOT.

When asked by Senator Menendez if batteries could be considered a dispatchable resource under the contemplated DRRS, Vegas indicated that they could if they met the requirements for availability and run time. Those attributes or requirements are still being formulated, but the 10 hours as currently written in the substitute bill could be challenging.