By Cyrus Reed
The Legislative Session So Far
About 60 days into the legislative session, and only two days left until we hit the March 14th deadline to file bills.
In the meantime, some 6,800 bills have already been filed, as we expect once again that more than 10,000 bills will be filed by the end of the week. Committees have been named finally in the house (see the list on House website here) , the budget writers are busy in Senate Finance and House Appropriations, and some bills with pretty big industry support are already moving along.. Fast.
As the Sierra Club gets ready for our big advocacy day on March 24th, we wanted to give our supporters and the public some initial thoughts on some important legislation - both what we support and what we don’t.
Want to go to our advocacy day March 24th? Here are the deets.
The State Budget: Key Environmental Allocations
As we continually remind everyone who will listen, the only bill that has to pass - otherwise our state government would literally shut down on August 31st - is the state’s two-year budget. Well here is some news - while neither body has yet to pass a budget, both have held multiple hearings on every single agency and both have “marked up” the budget, making initial decisions on which parts of the budget proposals to fund and which to not. We spent a lot of time the last few weeks telling legislators how to prioritize spending in our budget and we are thankful for those of you who also reached out to your legislators.
We expect both the Committee on Finance in the Senate and the House Committee on Appropriations to adopt their committee version of the budget soon with the Senate potentially adopting it Wednesday. But some good news - many of the agency requests we were supporting in our written and oral testimony were adopted in the House, including:
- An Extra $100 million for orphan well plugging:
- An extra $142 million for water and wastewater projects (which should bring down some $500 million in additional federal funds if Trump and Musk will let the law work);
- An extra $6 million for agricultural water conservation grants;
- An extra $115 million for air and water monitoring and staff for the Texas Commission on Environmental Quality;
- An extra $15 million for Ranch and Land Conservation Grants through the Texas Parks and Wildlife Department
- Money for inspectors and a tracking system for underground injection wells and “produced” wastewater for oil and gas;
- Extra money for TWDB for a variety of science data type things like weather stations, evapotranspiration monitors and groundwater analysis
- More money for TPWD for better access to fishing areas and wildlife refuges.
What happened in the Senate is a bit less clear because the Senate is more secretive and doesn’t allow public presence in their markup discussions. But they may adopt the budget on March 12th when all will be revealed. In the house, you can sit in a corner and watch though you can not speak.
Water Infrastructure and Funding Challenges
While we have been waiting with baited breath for a big water supply and infrastructure investment bill and at least part of the answer has come. First, both the Senate and House include an extra $2.5 billion in their budgets for the Texas Water Development Board for water infrastructure through the Texas Water Fund though the way they do it is slightly different - the House in the base budget and the Senate in the “supplemental” budget. Thus, we expect when the final supplemental budget and regular budget are approved before the end of session, the Legislature will have approved somewhere between $2.5 billion and $5 billion. The devil will be in the details and two different approaches in the Senate and House.
Based upon two big house bill filed earlier this week - HB 16 by Cody Harris and HJR (House Joint Resolution) 7 by Cody Harris, the House is less likely to dictate exactly how they want TWDB to spend the money. Instead they are trying to get all the TPWD programs into one larger program - the Texas Water Fund - add new categories of potential funding - and then allocate the money to TWDB to decide. As an example, HJR 7 would create a $1 billion annual program through sales tax allocation that would flow automatically to the TWDB’s Texas Water Fund, though the legislature could choose to lower the amount by 50% in any given year.
In contrast, in the Senate, Chair Charles Perry has yet to introduce his big water funding allocation bill, though he has introduced a number of clean-up bills and a new Senate Joint Resolution 66, that takes a very different approach than the house version. Perry’s constitutional amendment would also earmark money for TWDB (or a successor organization) but there appears to be a bit more money potentially allocated (relying on two sources of funding) and most importantly it would dictate that up until 2043, fully 80 percent of the funds would flow to the “New Water Supply for Texas” fund. In other words, the Senate is prioritizing “new” water supply - think desalination, produced water from oil and gas, and moving water from Arkansas or East Texas to West Texas over other options. While we have yet to do a deep dive, we are more comfortable with the House approach.
Key Water Bills to Watch
Some other important bills have been filed as well, including HB 1400 by Harris (and filed as Senate Bill 718 by Lois Kolkhorst) that would create a new funding mechanisms for groundwater districts to better analyse their quality and quantity, and two bills by Mary Gonzalez intended to make the Economically Distressed Areas Program more favorable to disadvantaged communities. We support these bills, which are HB 365, and HB 422.
Finally, one of our big priorities this session will be trying to protect water quality, and in particular our bays and estuaries. Recently, Rep. Morales Shaw introduced HB 3728, that requires TCEQ to develop new salinity standards for our bays and estuaries, while Rep Erin Zweiner introduced HB 4028, which would direct TCEQ to develop preproduction plastic standards, require “nurdle” and other plastic spills to be reported, and the development of best management practices and annual reporting by the plastic industry.
Another area of importance is how we handle produced water. This week, the Senate held a hearing on one bill - SB 1145 - that would transfer authority of the land application of “treated” produced water from the Texas Railroad Commission to the Texas Commission on Environmental Quality. While we agree with the transfer, we recommended to Chairman Brian Birdwell that the bill add required rulemaking, a specific reference to water quality standards, and enforcement provisions. We are unlikely to get these changes so we will focus on the House, generally a more favorable audience for many of our issues.
Grid Fixes and Cryptocurrency Impacts
Speaking of which, the Senate passed SB 21 by Schwertner which will create the Texas Bitcoin Strategic Reserve authorizing the state of Texas and its Comptroller of Public Accounts to invest money in cryptocurrency. I mean what could go wrong? Well we thought plenty, as we told the Senate a few weeks ago. Our testimony can be found here. Again, we will try and get some better protections for consumers in the house and some attention to the large water and energy use by bitcoin in particular.
One important bill on all large loads - including cryptocurrency, data centers and artificial intelligence among other huge loads coming to Texas and driving up consumer costs - is SB 6 by Phil King. While we don’t love everything about the bill -one portion requires that a large load sitting behind an existing generator would have to replace that power with “thermal” generation - ie more gas plants - we support the bill because of the extra interconnection requirements, and transmission fees that large loads would have to pay under the bill. See our testimony here. Without new law, it’s expected that much of the grid enhancement and transmission costs will fall on residential consumers.
Unfortunately, many legislators are not prioritizing solutions to our grid crisis that help residential consumers. This week, we testified against another Phil King bill - SB 388 - that would impose a new requirement on new generation that at least half has to be “dispatchable,” essentially slowing down the growth of renewable energy and making our grid more expensive by forcing some companies to pay others credits if they choose not to invest themselves. We suggested a very different approach as you can see in our testimony. On Tuesday, March 11th, the Senate Business and Commerce approved the bill as a committee substitute. Unfortunately, the bill got even worse, taking storage out of the bill and adding nuclear as a dispatchable generation in the definition. The bill passed out of committee on a 6-3 vote with the three democrats - Blanco, Zaffarini, and Johnson voting no.
Renewable Energy Under Attack
Beyond SB 388, there are a whole range of anti-renewable bills that would impose new permitting requirements, setback and environmental impact studies on renewable energy and in some cases storage. It’s not that there are not legitimate issues that should be addressed in renewable energy and storage siting, it’s that these bills are written in a way that are intended to slow down the industry.
This week, we saw how the worst of these bills - SB 819 by Lois Kolkhors and HB 553 by Jared Patterson - got support from their billionaire backers with a handout featuring a cute stuffed bat. Similar bills have also been filed by Bob Hall (SB 1478 and SB 1979) and Don McLaughlin (HB 3580), all of which require additional bonding and permitting requirements for renewable energy.
Again, there are some reasonable regulations that can and should be developed. For example we support the new regulations for storage contained in SB 1824 (HB 3809 by Darby) and SB 1825 (and HB 3824 by King) by Schwertner which establish reasonable standards on utility-scale storage facilities, but many of the other bills focused on storage and renewables are meant to slow down the industry.
It’s worth noting that there are other bills designed to instead allow reasonable regulation but actually encourage the development of solar, storage and other forms of distributed generation in particular, such as HB 3904 and HB 3905 by Mark Dorazio, and HB 3346 by Ron Reynolds. There are also some great bills intended to bolster our transmission system which will help make our grid more resilient and move clean energy from one area to another. We particularly like HB 3044 and HB 3069 by Drew Darby.
Energy Efficiency Bills We Support
In addition, several good bills on energy efficiency and payment assistance have also been filed that will save customers money and add to our grid resilience. These good bills include:
- SB 783 (Menendez) and HB 1360 (Hernandez) which require the State Energy Conservation Office to begin rulemaking to update our energy codes for new construction;
- HB 871 and HB 882 by Ron Reynolds which would require both cities and counties to update their building codes for new construction.
- SB 1514 (Nathan Johnson) and HB 3237 by Chris Turner which would require certain state agencies, universities and political subdivisions in some urban areas of the state to file annual energy management plans, including a goal to reduce consumption by five percent each year
- Sen. SB 1513 by Johnson and HB 1359 by Ana Hernandez which would create new payment assistance programs for working class Texans.
- SB 1915 and SB 1916 by Sen. Sara Eckhardt which would require private utilities to increase their goals, funding and programs to help Texans and small business owners to make their buildings more energy efficient.
- HB 4016 by Rafael Anchia would ban resistance heating in certain buildings, meaning they would have to use more efficient heat pump systems instead.
- HB 3826 by Hernandez would create the Texas Energy Efficiency Council, where utilities would coordinate with multiple agencies and stakeholders to coordinate energy efficiency and demand response programs.
- HB 2222 by Hernandez and SB 799 by Menendez would create new energy efficiency, solar and school bus programs for school districts.
The Push for Nuclear Subsidies
Well we knew it was coming - public taxpayer subsidization of nuclear power plants.
Last week, Tan Parker (SB 2060) and Cody Harris (HB 14) filed a bill to support the deployment of advanced nuclear reactors in this state that is all about creating new sources of funding that could authorize taxpayers funds for loans and grants for the development of “Small modular reactors” (SMRs) and other nuclear reactors, as well as other funding for supply chain components and workforce development.
Even though there are no such commercial projects currently in the queue, these bills are intended to jumpstart the moribund nuclear industry by creating state subsidies. Sierra Club is opposed to these bills which will divert important state funds that could be used for today’s solutions instead of tomorrow’s false promises. And nukes use lots of water and create long lasting radioactive waste.
Addressing Oil and Gas Pollution
In addition to a multitude of bills filed on produced water, the oil and gas industry has come to recognize they have a problem - thousands of orphaned and abandoned wells and about 150,000 wells that are “inactive” but not yet officially abandoned or orphaned.
The industry has been supporting several bills that are intended to help industry and their regulators - the Texas Railroad Commission - get a better handle on all these inactive and orphan wells. While both SB 1146 by Birdwell (and HB 3911 by Darby) - which deals with “adopting” orphan wells by industry - and SB 1150 by Middleton (and HB 2766 by Geren) - which deals with putting limits on how long inactive wells can be operated before they must be plugged - have some good in them, they will not resolve all the issues.
Sierra Club will be testifying this week on how to strengthen these bills, including by dealing with the actual initial bonds paid by industry and assuring that the bond follows the well.
Other issues related to oil and gas regulation, supported fully by the Sierra Club, include:
- HB 2891 by Anchia which would raise the maximum fines that can be levied against oil and gas violators from $5,000 or $10,000 per violation to $25,000.
- HB 1341 by Reynolds which would strengthen air quality standards, monitoring and enforcement of hydrogen sulfide from oil and gas and other industries that produce emissions of hydrogen sulfide
- HB 459 by Rosenthal that would create a no-routine flaring goal by 2031; and
- HB 3263 by Turner that would create a new methane emissions sensor program to find leaky pipes or wells and then give the agency enforcement discretion to allow industry 30 days to fix the problem and reduce pollution.
What’s Next?
This week we will be testifying in committees, trying to get additional legislative ideas and proposals filed, and gearing up for our Advocacy Day on March 24th.
In the meantime, we encourage our members and supporters to sign up for our legislative action team, respond to our action alerts, and participate in our regional pop-ups!
Direct advocacy matters. We were pleased to participate recently with our partners that are seeking better regulation of Preproduction plastic. It was inspiring to join our friends from Environment Texas, Surfriders, and other organizations to tell offices about HB 4028 to better regulate microplastics in our environment.
We know keeping up with all the bills is difficult, but have no fear. We will be developing our top 10 best and worst legislation lists for different issues.