Vol. No. 53-2 Utilities


Retrofitting the Grid: How Senator Manchin’s Permit Reform Could Facilitate an Energy Transition in Texas


Climate change will remain a prominent issue in the United States for decades. Attempting to decelerate global warming will require the country to undergo an energy transition and revolutionize its underlying electrical grid.[1] Partially with this end in mind, Senator Joe Manchin released the text for a bill that would accelerate the permitting process for energy projects across the U.S.[2] The initial ninety-one-page document was never formally introduced into the Senate, and Senator Manchin ultimately failed to tack a shorter version onto a defense spending package in December 2022.[3]

The proposal garnered an onslaught of criticism from all directions, including from Democrats, Republicans, and environmental groups.[4] Much of this criticism centered on the bill’s push for agencies to “take all necessary actions to permit the construction and operation” of a project in Appalachia and expedite the construction of other new fossil fuel pipelines.[5] Regardless of the proposal’s deficiencies, experts acknowledge that some kind of permitting reform is necessary for the large-scale renewable energy transition at hand.[6]

This Note explores the provisions proposed in Senator Manchin’s bill and how it might have impacted the construction of a hypothetical wind energy project in Texas’s High Plains region, which includes forty-one counties in the Texas Panhandle and West Texas.[7] Such a project would require permitting interactions with local governments, state agencies, and eventually the federal government.[8] This Note focuses on three key categories of federal permitting requirements—wildlife protection, air and water protection, and National Environmental Policy Act (NEPA) review—and how they would apply to a proposed turbine project. Then, it explores how these requirements would have interacted with Senator Manchin’s proposed legislation.

Federal Permitting Requirements

Wildlife Protection

Since turbine projects can potentially kill flying animals such as birds and bats, the U.S. Fish and Wildlife Service (FWS) has jurisdiction over any new wind installation in the High Plains of Texas.[9] The statutes that affect new wind turbines include the Migratory Bird Treaty Act, the Bald and Golden Eagle Protection Act, and the Endangered Species Act (ESA).[10] The ESA provides a straightforward example. If a project were to incidentally “take” a species on the endangered species list,[11] FWS must authorize the take through a formal permitting process.[12]

Air and Water Protection

Section 404 of the Clean Water Act requires permitting for projects that discharge dredged or fill materials into protected waters and wetlands.[13] A new turbine project in the High Plains would likely fall under this statute’s jurisdiction due to the presence of playa lake wetlands throughout the region,[14] which are essential to the cyclical recharge of the Ogallala aquifer.[15] These jurisdictional waters would be affected by large amounts of waste product from project construction—both from the turbine facility itself and the miles of transmission lines required to bring the power to population centers like Dallas and Austin.[16]

National Environmental Policy Act (NEPA) Review

NEPA is unlike the above statutes in that it is a procedural requirement rather than a permitting mandate.[17] NEPA requires a two-stage evaluation of the environmental impacts of a proposed federal action and is overseen by the White House Council on Environmental Quality.[18] First, for a new wind project, an agency overseeing the permitting process—for example, FWS for projects affecting land species[19]—must prepare an “environmental assessment” to determine whether the project would have a significant impact on the environment.[20] If the agency determines there would be a significant impact, it must then prepare a longer and more detailed “environmental impact statement” (EIS).[21] This review allows local communities, industry groups, and environmental organizations to comment on the project. Our hypothetical wind installation in the High Plains of Texas would certainly require a full NEPA review.[22]

NEPA tends to be the target of criticism since the review process can be lengthy (a median of three and  a half years), although the cause of such delays are in dispute.[23] Even after an agency finishes its EIS, litigants frequently challenge projects on the basis of procedural deficiencies, causing further delays, increasing costs, and stalling momentum for new projects.[24] While NEPA has provided wins for environmental groups,[25] it also poses a hurdle to new renewable energy projects that must be planned for.

How Senator Manchin’s Bill Would Affect This Process

Senator Manchin’s bill would impact a proposed wind facility in the High Plains by accelerating NEPA review and setting a statute of limitations for court challenges.[26] First, the bill defines “major project” as one that requires “multiple authorizations, reviews, or studies” and one that requires an EIS.[27] Since our proposed facility would be a significant public utility, it would likely be classified as a “major project”; this analysis will proceed under this assumption.

As a first step in the accelerated process, the “lead agency”[28]—e.g., the Environmental Protection Agency—would coordinate with each “participating agency”[29]—e.g., FWS for ESA authorization—to create a single environmental document that covers all applicable environmental statutes.[30] Currently, projects may require multiple agencies to create separate documents, such as a “Biological Opinion” prepared by FWS.[31] Additionally, the bill sets a page limit for this singular environmental document of 150 pages, with extra space of up to 300 pages for a project “of unusual scope or complexity.”[32] For major projects, this entire environmental review process should be finished no later than two years after the lead agency provides notice that it will began preparing an EIS.[33] Thus, for our proposed wind facility, if the permitting process would begin now, environmental review would be statutorily required to conclude by 2025 rather than 2026 or later.[34] If an agency in this process fails to meet the deadline, the project sponsor may petition a court to issue an order to the agency to complete its task within ninety days.[35]

Should the involved federal agencies, state officials, or project sponsors reach an impasse, the bill sets forth prescribed dispute resolution schedules to keep the major project moving forward.[36] Regarding potential litigation for a project, the bill sets a statute of limitations of 150 days after an agency finalizes the permit application and requires the reviewing court to undergo “expedited consideration.”[37] If any aspect of the environmental document is remanded, the court must set a “reasonable schedule” to fix the deficiency, not to exceed 180 days from the initial court order.[38]

An additional aspect of Senator Manchin’s bill would assist with creating the expansive new transmission lines required for wind energy expansion in the High Plains. Should the transmission lines be trapped in the CWA state-certification phase, the bill would   empower the Federal Energy Regulatory Commission (FERC) to issue a construction permit for transmission siting.[39] Since any new transmission lines for a wind project in the High Plains would likely be attached to the interstate electrical grid, this reform would likely apply to the theoretical wind facility.[40] Thus, in this case, if the Public Utility Commission of Texas failed to act on a permit application within one year, FERC might intercede and issue one itself.[41]


Constructing new electrical facilities is an exceedingly complex process. Even One could easily get lost digging through the text of the permit reform legislation and its numerous exceptions, deadlines, and chokepoints which could kill a new project. This Note only touches the surface of the regulatory requirements that must be met before applicants can construct new facilities. There is no doubt that some reform is needed to expedite the energy transition. Senator Manchin’s bill provides a starting point for legislators and regulators to consider how to best balance environmental interests while facilitating the transformation of our energy grid.

Paul Sarahan is a member of Enoch Kever PLLC. He focuses his practice on environmental, safety, and transportation issues. He has 28 years of experience in policy, regulation, and commercial use of the environment and has represented clients in the energy, chemical, manufacturing, transportation, and retail industry sectors before federal, state, and local agencies. Paul is a graduate of the University of Texas at Austin, The University of Texas School of Law, and the University of Houston Law Center’s Energy, Environmental and Natural Resources LL.M. program.


Jesse Bennett is a dual JD/MPAff student in his second year from Rochester, New York. He attended Hamilton College where he majored in economics and minored in history. Jesse joined TELJ as a 1L.



[1]      Shannon Osaka, To Fight Climate Change, Environmentalists May Have to Give Up a Core Belief, The Wash. Post (Sep. 2, 2022, 7:00 AM), https://www.washingtonpost.com/climate-environment/2022/ 09/02/fight-climate-greens-have-embrace-big-energy-projects-fast/; see also Steve Cohen, Fossil Fuels Are Dying, but They’re Not Dead Yet, Colum. Climate Sch.: State of the Planet (Nov. 14, 2022), https://news.climate.columbia.edu/2022/11/14/fossil-fuels-are-dying-but-theyre-not-dead-yet/.

[2]      Press Release, Senate Comm. on Energy & Nat. Res., Manchin Releases Comprehensive Permitting Reform Text to be Included in Continuing Resolution (Sep. 21, 2022), https://www.energy.senate. gov/2022/9/manchin-releases-comprehensive-permitting-reform-text-to-be-included-in-continuing-resolution (referencing the Energy Independence and Security Act of 2022).

[3]      See Maxine Joselow, Democrats Try to Salvage Manchin’s Side Deal on Energy Projects, The Wash. Post (Dec. 4, 2022, 10:32 PM), https://www.washingtonpost.com/climate-environment/2022/12/04/ manchin-permitting-reform-bill/; Press Release, Senate Comm. on Energy & Nat. Res., Manchin Releases Permitting Text and Urges Colleagues to Support MVP and Permitting Amendment to NDAA (Dec. 7, 2022).

[4]      Maxine Joselow, Manchin’s Permitting Bill Sets up Dramatic Clash Over Government Funding, The Wash. Post (Sep. 22, 2022, 8:23 AM), https://www.washingtonpost.com/politics/2022/09/22/manchin-permitting-bill-sets-up-dramatic-clash-over-government-funding/ (noting opposition from Senators Bernie Sanders and Tim Kaine); Letter from Jeff Landry, La. Att’y General, et al. to Chuck Schumer, Majority Leader, Senate, and Mitch McConnell, Minority Leader, Senate (Sep. 26, 2022), https://www.tn.gov/content/dam/tn/attorneygeneral/documents/pr/2022/pr22-37-letter.pdf (collecting signatures of Republican state attorneys general); Letter from ActionAid USA et al. to Chuck Schumer, Majority Leader, Senate, and Nancy Pelosi, Speaker, House of Representatives (Aug. 24, 2022), https://peoplevsfossilfuels.org/dirty-deal-letter/ (opposing fossil fuel projects and proposed permitting reform); Rachel Frazin, Senate Rejects Manchin’s Energy Permitting Amendment to Defense Bill, The Hill (Dec. 15, 2022, 6:37 PM), https://thehill.com/policy/energy-environment/3776418-senate-rejects-manchins-energy-permitting-amendment-to-defense-bill/.

[5]      Daniel Moore, Mountain Valley Pipeline Shield in Manchin Deal Raises Hackles, Bloomberg L. (Aug. 2, 2022, 12:59 PM), https://news.bloomberglaw.com/environment-and-energy/mountain-valley-pipeline-shield-in-manchin-deal-raises-hackles (quoting the Energy Independence and Security Act of 2022).

[6]      See Shannon Osaka, Why the Defeat of Manchin’s Energy Bill Could Be a Loss for the Climate, The Wash. Post (Sep. 28, 2022, 1:47 PM), https://www.washingtonpost.com/climate-environment/2022/ 09/28/manchin-permitting-reform-climate/.

[7]      See Jayme Lozano, Why the Texas Grid Causes the High Plains to Turn Off Its Wind Turbines, The Tex. Trib. (Aug. 2, 2022, 10:00 AM), https://www.texastribune.org/2022/08/02/texas-high-plains-wind-energy/ (exploring the potential for cheap power from the region and barriers to scaling-up wind facilities).

[8]      Id.; see also Rayan Sud & Sanjay Patnaik, How Does Permitting for Clean Energy Infrastructure Work?, Brookings (Sep. 28, 2022), https://www.brookings.edu/research/how-does-permitting-for-clean-energy-infrastructure-work/ (explaining the federalized process for permitting new projects).

[9]      See U.S. Fish & Wildlife Serv., Land-Based Wind Energy Guidelines 1–4 (2012), https://www.fws.gov/sites/default/files/documents/land-based-wind-energy-guidelines.pdf (introducing and explaining FWS’s statutory authority over wind energy projects).

[10]     Id.

[11]     See 16 U.S.C. § 1532(19) (“The term ‘take’ means to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.”).

[12]     See id. § 1536(a)(2) (requiring formal consultation when federal funding or permitting is involved); id. § 1539(a)(1)(B) (requiring an individual incidental take permit).

[13]     33 U.S.C. § 1344; Permit Program Under CWA Section 404, Env’t Prot. Agency, https://www.epa. gov/cwa-404/permit-program-under-cwa-section-404 (last updated Apr. 20, 2022).

[14]     Panhandle Playa Lakes, Tex. Parks & Wildlife, https://tpwd.texas.gov/landwater/land/habitats/high_ plains/wetlands/playa.phtml (last visited Aug. 1, 2023) (“Playas are shallow, circular-shaped wetlands that are primarily filled by rainfall, although some playas found in cropland settings may also receive water from irrigation runoff.”).

[15]     Rudolph A. Rosen, Texas Aquatic Science Textbook (2013).

[16]     See Sud & Patnaik, supra note 9 (“Wind . . . projects . . . likely [] need Clean Air Act and Clean Water Act permits during their construction phases as they entail regular construction pollution.”); Lozano, supra note 8 (noting the need for extensive transmission construction).

[17]     See Sud & Patnaik, supra note 9 (“NEPA does not mandate a separate permit like the other [environmental] laws . . . . Instead, it is a procedural law, requiring an assessment of the environmental impacts of any significant federal action, including any project that the federal government issues a permit for.”).

[18]     Id.; 42 U.S.C. § 4344 (denoting the duties and functions of the Commission on Environmental Quality (CEQ)); see also 40 C.F.R. § 1500.1 (2023) (explaining CEQ’s interpretation of the purpose and policy behind NEPA).

[19]     See 40 C.F.R. § 1501.7 (2023) (establishing that a lead agency will oversee NEPA review for each project); see, e.g., Draft Environmental Impact Statement and Habitat Conservation Plan for Commercial Wind Energy Developments Within Nine States, 76 Fed. Reg. 41,510, 41,511 (July 14, 2011) (“[W]e, the Fish and Wildlife Service, as lead agency, advise the public that we intend to prepare an [EIS] on a proposed application . . . .”).

[20]     See 40 C.F.R. § 1501.5 (2023).

[21]     See 42 U.S.C. § 4332(C) (primary authorizing statute); 40 C.F.R. §§ 1502.1–.24 (2023) (CEQ’s implementing regulations).

[22]     See Sud & Patnaik, supra note 9 (“Nearly every major renewable energy project requires a NEPA review.”).

[23]     Id.

[24]     Id.; see, e.g., Am. Rivers v. FERC, 895 F.3d 32, 55 (D.C. Cir. 2018) (vacating relicensing for a hydroelectric project on procedural grounds); Pub. Emps. for Env’t Resp. v. Hopper, 827 F.3d 1077, 1090 (D.C. Cir. 2016) (vacating and remanding the EIS prepared for a proposed offshore wind facility in Massachusetts).

[25]     See, e.g., WildEarth Guardians v. U.S. Bureau of Land Mgmt., 870 F.3d 1222, 1240 (10th Cir. 2017) (striking down an EIS for coal leases and further delaying the project).

[26]     U.S. Senate Comm. on Energy & Nat. Res., 117th Cong., Building American Energy Security Act of 2022 8–11, 38, https://www.energy.senate.gov/services/files/FAED4818-E382-4210-B452-5A3D0D8D58A8?utm_source=DCS+Congressional+E-mail&utm_medium=Email&utm_term=https% 3a%2f%2fwww.energy.senate.gov%2fservices%2ffiles%2fFAED4818-E382-4210-B452-5A3D0D8D 58A8&utm_campaign=Manchin+Releases+Permitting+Text+and+Urges+Colleagues+to+Support+MVP+and+Permitting+Amendment+to+NDA (last visited Aug. 1, 2023) (introduced by Senator Manchin).

[27]     Id. at 4.

[28]     Id. at 3.

[29]     Id. at 4.

[30]     Id. at 14–15.

[31]     See, e.g., Am. Rivers v. FERC, 895 F.3d 32, 44–45, 49–50 (D.C. Cir. 2018) (documenting that the project required both a proper Biological Opinion and EIS).

[32]     Building American Energy Security Act of 2022, supra note 29, at 16.

[33]     Id. at 21.

[34]     See id.; Sud & Patnaik, supra note 8 (noting the median review time for an EIS is 3.5 years).

[35]     Building American Energy Security Act of 2022, supra note 29, at 30–31.

[36]     Id. at 32–35.

[37]     Id. at 38.

[38]     Id. at 38–39.

[39]     Id. at 65.

[40]     See Regional Transmission Organization Map, Fed. Energy Regul. Comm’n, https://www.ferc.gov/ sites/default/files/2020-05/elec-ovr-rto-map.pdf (last visited Aug. 1, 2023) (demonstrating the High Plains region overlaps with an interstate electrical grid); see also NextEra Energy Capital Holdings, Inc. v. Lake, 48 F.4th 306, 310 (5th Cir. 2022) (noting the interstate nature of electricity grids and that Texas’s statute banning out-of-state entrants to its energy markets violates the dormant Commerce Clause).

[41]     Building American Energy Security Act of 2022, supra note 29, at 67–68.

Vol 52-2 Utilities


Texas’ Response to Winter Storm Uri – Structure of Electricity Markets and Risk Management


In February 2021, Winter Storm Uri shocked the electricity market in Texas and caused millions of customers to go without electricity, heat, or running water for days in freezing temperatures.[1] When the power finally came back on, members of the electricity market and individual customers were further shocked by astronomical prices driven by high demand during a period of very short supply.[2] During the 2021 Texas Legislative session, several bills were passed to address the problems made apparent by the winter storm.[3] The Texas Legislature focused on several key areas of improvement. One of the main areas of concern included regulating the structure of the electricity market and implementing risk mitigation strategies for future market disruption. This included implementing changes that required rulemaking procedures by state agencies including the Public Utility Commission of Texas (“PUC”) and the Texas Railroad Commission (“RRC”).[4] While the Texas legislature made significant legislative changes to support the power grid, these changes will take time and may not have a significant impact for several years.[5]

Senate Bill 3 – A Comprehensive Bill

Senate Bill 3 was one of the most expansive bills to address the structure of the electricity market and the mitigation of risk related to future market disruptions.[6] Among other things, it required the PUC to undertake rulemaking procedures to create requirements for the weatherization of power systems.[7] The PUC implemented Phase 1 of these rules to address current market needs.[8] These rules were met by 321 out of the 324 electric generation units and transmission facilities that ERCOT inspected by January 18, 2022.[9] Phase 2 will be a longer process which will elaborate on these rules and take ERCOT’s weather report into consideration.[10] Additionally, a bond issuance was approved to finance weatherization and to support customers who faced abnormally high bills from February 2021.[11] While this financing helps mitigate the up-front cost associated with both weatherization and utility bills, it will increase customer payments in the form of additional utility charges for years to come.[12] 

Senate Bill 3 also required the PUC to undergo rulemaking allocating load shedding among different electrical facilities and categorizing circuits as critical based on historical peak demand.[13] During Winter Storm Uri the power supply could not support the power demand, resulting in involuntary load shedding in the form of rolling blackouts that left many customers without power for days.[14] This was due in part to ERCOT underestimating the severity of the demand.[15] Amended rules regarding involuntary load shedding took effect on January 6, 2022.[16] This bill also required the PUC to enact rulemaking focused on improving emergency planning, lowering the price cap during periods with limited availability, and increasing the strength of penalties for failing to follow regulations.[17] While the PUC undertook rulemaking that reduced the price cap from $9,000/MWh to $5,000/MWh, the reduced cap was not restricted to periods of limited availability.[18] In response to several of the directives in Senate Bill 3 and other legislation related to Winter Storm Uri, the PUC undertook to reform the ERCOT wholesale electricity market in a “Blueprint” that detailed the two-phase reform plan.[19] There were several references to these changes in the January 13, 2022 Blueprint to implement many directives related to reforming the wholesale electricity market as future next steps.[20] While the classification system for violations has been amended to include violations of weatherization requirements,[21] natural gas facilities that are not voluntarily deemed “critical” are exempted from the penalties.[22] Because of this exemption, the natural gas sector and the RRC have drawn criticism from many, including the legislators who wrote Senate Bill 3.[23] While the RRC argues that listing every natural gas facility as “critical” would negatively impact the availability of electricity to everyone else,[24] this argument misses the point. The concern is not whether all natural gas facilities are critical; the concern is whether all natural gas facilities are required to weatherize in case of emergency. 

In addition to these comprehensive changes to the energy market itself, Senate Bill 3 also expanded the governance of the electricity market.[25] While other bills made changes to the existing structure in ERCOT[26] and the PUC,[27] Senate Bill 3 created three new governing bodies to help implement the changes established in the bill. First, the Texas Energy Reliability Council (“TERC”) exists to “(1) ensure that the energy and electric industries in [Texas] meet high priority human needs and address critical infrastructure concerns; and (2) enhance coordination and communication in the energy and electric industries in [Texas].”[28] The bill requires that TERC to obtain utility information related to disasters and mandates that public utilities and gas providers supply any such information.[29] Second, the Texas Electricity Supply Chain Security and Mapping Committee (“TESCSMC”) was created to map the electrical supply chain in Texas, identify critical infrastructure sources, establish best practices for preparing facilities to maintain services in the event of extreme weather, recommend oversight and compliance standards for these purposes, and prioritize service needs to prepare for, respond to, and recover from extreme weather.[30] TESCSMC was required to submit a report related to their newly assigned duties by January 1, 2022 and must complete the map by September 1, 2022. Last, the State Energy Plan Advisory Committee (“SEPAC”) functions to create a comprehensive state energy plan no later than September 1, 2022, in order to identify barriers, provide recommendations to overcome or remove those barriers, and evaluate methods to improve electric service, including ancillary services and emergency response.[31] 

Senate Bill 1281 – Updating Regulation of Transmission Projects

Another significant bill passed to address the structure of the market and mitigate the risk of future disruptions was Senate Bill 1281.[32] One priority of this bill was to expand the exception from obtaining a certificate of convenience and necessity (“CCN”).[33] An electric utility is required to obtain a CCN before building new transmission lines.[34] The previous exception to the CCN requirement applied to transmission lines between substations or customers if (1) the new line did not exceed one mile and (2) affected landowners whose property is crossed gave prior written consent.[35] The new codified exception expanded these criteria to apply when (1) transmission lines do not exceed 3 miles for connections to customers or 2 miles for generation connections, (2) all directly affected landowners give consent, and (3) necessary rights-of-way have been purchased.[36] The previous CCN exception existed in the PUC’s rules, but with the new legislation, the PUC must initiate rulemaking to adopt the new standard.[37] In addition to this expansion, the legislation aimed to refocus the review of proposed projects onto reliability criteria.[38] This included consideration of historical load, forecasted load growth, additional load seeking interconnection, and an analysis of the cost and benefits to consumers.[39] The PUC has not yet opened rulemaking procedures to incorporate these changes. Another goal of this bill was to create a mandatory biennial reliability assessment to be conducted by ERCOT that “consider[s] the impact of different levels of thermal and renewable generation availability; and recommend[s] transmission projects that may increase the grid’s reliability in extreme weather scenarios.”[40] 

House Bill 16 – Protecting Residential and Small Commercial Customers

House Bill 16 aimed to revamp the structure of the electricity market and focused on increasing regulation of certain retail electric products, specifically related to wholesale indexed power products and fixed rate products.[41] An aggregator, broker, or retail electric provider cannot offer wholesale indexed products to residential or small commercial customers, but they may continue to offer these products to other customers as long as they obtain signed acknowledgement of the associated risk from the customer.[42] This restriction helps protect residential or small business customers from the exponential price increases due to wholesale prices in times of extreme demand. In addition to limiting exposure to wholesale indexed pricing, this legislation updated notice requirements regarding the expiration of a fixed rate product.[43] Now, when a fixed rate contract is set to expire, the provider must provide three written notices in evenly distributed intervals during the last third of the contract period and the final notice must include terms for the default renewal product.[44] Any default renewal product must be clearly communicated in the contract and in the final notice, must be month to month, and the customer must be able to cancel at any time without a fee.[45] Failure to comply with the notice requirements results in the provider continuing to provide the fixed-rate product until proper notice is given or the customer selects a different product.[46] The PUC undertook rulemaking procedures to implement the requirements of House Bill 16, and these updated rules became effective as of January 6, 2022.[47]


While the Texas legislature took steps toward solving the problems with the Texas electricity market, the work has just begun.[48] The sheer amount of change required by the legislation will take years to implement, as demonstrated by the multi-phased plans proposed by PUC and ERCOT.[49] While some have claimed that sufficient change has been made to survive the “test” of the 2022 winter season, this most recent winter season did not compare to Winter Storm Uri.[50] The new legislation and regulation resulting from Winter Storm Uri is a significant step in the right direction, but the Texas electricity market has a long way to go to implement these changes and successfully shift the focus of the market to reliability.  


Michelle White is a 3L living in Hutto, Texas. Originally from Wimberley, Texas, she attended Texas A&M University before working for several years in Human Resources in Dallas. She joined TELJ her first semester of law school. During summer of 2022, she worked at Lloyd Gosselink and Naman Howell.


Alisha Mehta is an attorney in the Environmental and Legislative section of Jackson Walker’s Austin office. She focuses on permitting and water matters, including real estate developers and special utility districts and counsels clients on transactional and regulatory issues before the Public Utility Commission of Texas.


[1] See Joshua Fechter, Texas’ Power Grid Held Up During Last Week’s Winter Weather. Experts Say It Wasn’t Seriously Tested, The Tex.as Tribune (Feb. 8, 2022), https://www.texastribune.org/2022/02/08/texas-winter-weather-power-grid/.

[2] SourceMedia Bond Buyer, Texas Storm Uri, a Year Later: Financial, Political Fallout Lingers, Fidelity (Feb. 7, 2022), https://eresearch.fidelity.com/eresearch/markets_sectors/news/story.jhtml?storyid=202202071242SM______BNDBUYER_0000017e-d4b7-df57-a37e-dcb7abc10001_110.1.

[3] Texas Legislative Response to Winter Storm Uri, Baker Botts (July 7, 2021), https://www.bakerbotts.com/thought-leadership/publications/2021/july/texas-legislative-response-to-winter-storm-uri.

[4] See Tex. S.B. 3, 87th Leg., R.S. (2021); see Tex. S.B. 1281, 87th Leg., R.S. (2021); see Tex. H.B. 16, 87th Leg., R.S. (2021).   

[5] Fechter, supra note 1.

[6] See Tex. S.B. 3, 87th Leg., R.S. (2021).

[7] Id.

[8] 16 Tex. Admin. Code § 25.55 (2022) (Pub. Util. Comm’n of Tex., Weather Emergency Preparedness).  

[9] Final Winterization Report: Texas Grid Ready for Winter Weather Operations, ERCOT (Jan. 18, 2022), https://www.ercot.com/news/release?id=50d48648-2119-1c22-e9e9-a32f57650203 

[10] Pub. Util. Comm’n of Tex., Ord. Adopting New 16 TAC § 25.55 as Approved at the Oct. 21, 2021 Open Meeting, 46 Tex. Reg. 5659, 5698 (2021).

[11] Tex. S.B. 3, 87th Leg., R.S. (2021).

[12] Scott Friedman, What Texas Lawmakers Did (And Did Not Do) to Address the Power Crisis, NBC DFW (June 2, 2021), https://www.nbcdfw.com/investigations/what-texas-lawmakers-did-and-did-not-do-to-address-the-power-crisis/2646711/.

[13] Tex. S.B. 3, 87th Leg., R.S. (2021).

[14] The Timeline and Events of the February 2021 Texas Electric Grid Blackouts, The Univ. of Tex. at Austin, Energy Inst. (July 2021), https://www.puc.texas.gov/agency/resources/reports/UTAustin_(2021)_EventsFebruary2021TexasBlackout_(002)FINAL_07_12_21.pdf.

[15] Id.

[16] 16 Tex. Admin. Code § 25.479 (2022) (Pub. Util. Comm’n of Tex., Issuance and Format of Bills).

[17] Tex. S.B. 3, 87th Leg., R.S. (2021).

[18] 16 Tex. Admin. Code § 25.505 (2021) (Pub. Util. Comm’n of Tex., Reporting Requirements and the Scarcity Pricing Mechanism in the Electricity Reliability Council of Texas Power Region). 

[19] Pub. Util. Comm’n of Tex., Approval of Blueprint for Wholesale Electric Market Design and Directives to ERCOT, Project No. 52373 (Jan. 13, 2022), http://interchange.puc.texas.gov/Documents/52373_336_1180125.PDF

[20] Id.

[21] 47 Tex. Reg. 1226, 1240 (2022) (to be codified at 16 Tex. Admin. Code § 25.8). 

[22] Tex. S.B. 3, 87th Leg., R.S. (2021).

[23] Mitchell Ferman, Texas senators blast regulator for power grid winterization loophole lawmakers wrote into law, The Texas Tribune (Sept. 28, 2021), https://www.texastribune.org/2021/09/28/texas-power-grid-loophole/

[24] Christian Flores, Railroad Commission implements weatherization law after reports and experts raise concerns, CBS Austin (Nov. 30, 2021), https://cbsaustin.com/news/local/railroad-commission-implements-weatherization-law-after-reports-and-experts-raise-concerns#:~:text=Senate%20Bill%203%20requires%20all,of%20%241%20million%20per%20day

[25] Tex. S.B. 3, 87th Leg., R.S. (2021).

[26] Tex. S.B. 2, 87th Leg., R.S. (2021).

[27] Tex. S.B. 2154, 87th Leg., R.S. (2021).

[28] Tex. S.B. 3, 87th Leg., R.S. (2021).

[29] Id.

[30] Id.

[31] Id.

[32] Tex. S.B. 1281, 87th Leg., R.S. (2021).

[33] Id.

[34] Texas Legislative Response to Winter Storm Uri, Baker Botts (July 7, 2021), https://www.bakerbotts.com/thought-leadership/publications/2021/july/texas-legislative-response-to-winter-storm-uri.

[35] Id.

[36] Tex. S.B. 1281, 87th Leg., R.S. (2021).

[37] Id.

[38] Id.

[39] Id

[40] Id.

[41] Tex. H.B. 16, 87th Leg., R.S. (2021).   

[42] Id.

[43] Id.

[44] Id.

[45] Id.

[46] Id.

[47] 46 Tex. Reg. 9233, 9269 (2021) (to be codified at 16 Tex. Admin. Code §§ 25.43, 25.471, 25.475, 25.479, 25.498, 25.499). 

[48] Herman K. Trabish, Texas just dodged a repeat of 2021 outages, but its power sector has a long way to go, analysts say, UtilityDive (Feb. 25, 2022), https://www.utilitydive.com/news/texas-just-dodged-a-repeat-of-2021-outages-but-its-power-sector-has-a-long/618768/.

[49] Id.

[50] Id.

Vol. 52-1 Utilities




In February 2021, winter storm Uri swept from the Pacific Northwest to the East Coast, leaving many in southern states without basic resources like electricity and water.[1] Texas was especially hard-hit, due in part to its lack of winter-weather-capable infrastructure.[2] Two hundred and ten residents died as a result of the storm, due mostly to hypothermia.[3] Millions more lost power for multiple days.[4] Even at the disaster’s beginning, it was immediately clear to electric grid operators within the Energy Reliability Council of Texas (ERCOT) that electricity generation was failing and would be unable to meet soaring demand.[5] Operators ordered distribution companies to shed load, leading to controlled outages[6] that left almost 70% of ERCOT customers without power for an average of 42 hours during the storm.[7]

When state legislators reconvened after the storm, they clamored to pass a torrent of legislation in response to the spectacular failure of Texas’ primary electric grid. Many state politicians blamed renewable sources of energy for the grid’s failure, with a conservative news correspondent even claiming “it seems pretty clear that a reckless reliance on windmills is the cause of this disaster.”[8] Contrary to these claims, however, failures throughout the natural gas supply and generation chain were mostly to blame for the failure in electricity generation.[9] Despite this fact, the legislative response to the grid’s performance during the winter storm keeps one eye pointed toward renewable sources of energy and opens the door to financially penalizing these sources through rulemaking, while neglecting to remediate the issues that resulted in the failure of natural gas facilities and related supply issues. 


Renewables’ Performance During the Storm

            At the peak of the blackouts, the highest amount of unavailable electricity due to generator outages and underperformance was 52,037 megawatts (MW).[10] For comparison, ERCOT has an expected total peak capacity of about 78,000 MW,[11] meaning that during the worst part of the storm, only 33% of the grid capacity was available for use. While all sources of energy failed to some extent during the storm, ERCOT notes that thermal sources—including coal, natural gas, and nuclear—lost nearly twice as many gigawatts of power as renewables.[12] ERCOT had previously prepared a worst-case extreme winter scenario, in which it expected to lose 14,000 MW of thermal resources.[13] In reality, thermal outages were more than twice that high during Uri[14], while demand was also 10,000 MW higher than projected.[15] Meanwhile, renewable energy sources contributed to only 13% of the power outages[16] and, importantly, wind power had only been projected to make up about 7% of ERCOT’s winter grid capacity to begin with.[17] In a post-storm report, an independent director of the ERCOT board stated that “relative to expectations, renewables overperformed, and thermal plants underperformed during the crisis.”[18]

            The across-the-board failures of the grid were due to a lack of winterization, as all types of power generation were left susceptible to freezing.[19] The federal government had previously warned ERCOT about its lack of weatherization after significant blackouts on Super Bowl Sunday in 2011.[20] An analysis from federal agencies after the 2011 blackouts advised power producers and natural gas suppliers in Texas to winterize in order to prevent future weather-related blackouts.[21] Additionally, the report pointed out a regulatory blind spot that left grid operators not knowing what facilities to prioritize when shedding load.[22] Power operators and gas suppliers had the option to file paperwork designating themselves as critical infrastructure, yet many had failed to file the 2-page document.[23] Although the 2011 report urged Texas regulators to correct these problems, power producers and natural gas suppliers were both repeat offenders during winter storm Uri.[24]  Clearly, the state’s response to such warnings has been inadequate. Power companies have complained that low electricity prices provide no incentive to make such improvements, but new laws may finally push generators to make changes.[25] 


Legislative Response

            New law SB 3 stands out from a flurry of new legislation as the most significant bill impacting suppliers of renewable energy. This bill deals with ancillary services, which are additional power resources beyond those needed to meet real-time customer demand that act as insurance in case of an unexpected interruption to the grid. It is imperative that there is at least enough electricity supply to match demand at all times—if demand exceeds supply and causes the frequency of the grid to drop outside its operating range, it can cause physical damage to infrastructure and lead to a complete failure of the grid for weeks.[26] Ancillary services are an important counterpart to nondispatchable sources of energy, or sources that cannot be turned on and off at will. Because wind and solar generation are nondispatchable and variable by nature, ERCOT purchases ancillary services as a back-up in case they fail to generate as much power as expected.[27] Currently, the cost of ancillary services are distributed among consumers,[28] but SB 3, which became effective immediately upon signing on June 8, now shifts at least some of the burden to renewable energy providers.[29] 

            SB 3 amends the Texas Public Utility Regulatory Act (PURA) to require the Public Utility Commission of Texas (PUC) to determine whether existing ancillary services continue to meet the needs of the ERCOT market by reviewing existing services and their costs.[30] This amendment also requires ERCOT to modify the design, procurement, and cost allocation of ancillary services “in a manner consistent with cost-causation principles and on a non-discriminatory basis.”[31] Although this cost allocation appears sound, agencies promulgating such cost-causation principles will face challenges in defining them due to the highly variable nature of consumer demand and the intermittency of non-dispatchable wind and solar generation.[32] New rulemakings could shift the relative allocation of costs of ancillary services either to renewables or across multiple categories of generation, but ultimately the final cost decisions are placed on the regulators defining cost-causation principles.[33]

            The bill also requires the PUC to oversee ERCOT in determining the amount and type of ancillary services needed to ensure reliability during extreme heat or cold events and when intermittent sources of generation like wind and solar are low.[34] This review must be conducted at least annually.[35] ERCOT must procure such ancillary services on a competitive basis and ensure that they are dispatchable, reliable, and capable of continuous use during extreme weather in the season for which the service is procured.[36]

            Lastly, SB 3 requires the PUC to promulgate rules requiring most electricity generation providers to implement weatherization measures.[37] Furthermore, providers of generation that experience “repeated or major weather-related forced interruptions of service” must contract with third-parties to assess their weatherization efforts and must comply with any recommendations in such assessment if ordered to do so by the PUC.[38] This provision will impact both renewable and thermal generators.

            As a separate matter, SB 1281 requires ERCOT to assess the grid’s reliability in possible extreme weather scenarios every other year. These assessments will consider the impacts of both thermal and renewable generation and recommend transmission projects that will increase the reliability of the grid.[39] 

Proposed Railroad Commission (RRC) rulemakings stemming from recent legislation would require facilities all along the natural gas supply chain to file critical infrastructure paperwork or else face a penalty of $2,500.[40] This rule differs from the previous system, under which facilities that wished to be designated as critical were merely encouraged to submit such paperwork on their own initiative.[41] While affected operators would now be required to file critical infrastructure paperwork, they would retain the option to either designate themselves as critical or simply pay $150 and declare they are opting out of the designation if they are not equipped to operate during a weather emergency.[42] Facing the costs of weatherization to ensure operability in weather emergencies, it may be more economical for some facilities along the natural gas supply chain to opt out of the critical designation and allow themselves to be shed during power shortages.  


Problem Solved?

            The mere fact of legislative focus on ancillary services seems to imply that ERCOT’s current level of reliance on non-dispatchable sources like wind and solar is what caused the massive outages during winter storm Uri. In light of this political framing, agencies may choose to allocate a high proportion of ancillary service costs to renewable generators, potentially impacting the growth of the renewable market and in turn limiting the amount of renewable generation the grid relies on. The implication that even low reliance on renewables leads to outages is contrary to the truth that renewable sources overperformed during Uri as compared to expectations while thermal sources drastically underperformed even worst-case scenario projections. 

Because a lack of weatherization is to blame for the gross underperformance of all types of generation during Uri, procuring additional ancillary services is likely not enough to prevent future outages. Even with more such services waiting in the wings, they will not serve their purpose as reliable safeguards if they are not properly weatherized. Priority should be placed on building the resiliency of primary sources of generation rather than on procuring a greater number of equally vulnerable sources. The natural gas supply and generation chain is in most urgent need of weatherization as it makes up the majority of ERCOT’s electricity mix and has proven to be susceptible to extreme cold. While renewable sources also need weatherization, spotlighting them in the conversation distracts from the pressing need to weatherize the thermal sources that provide most of Texas’ electricity. 

Pending rulemakings will determine the extent to which generators will be required to weatherize beyond what market forces acting alone have called for. Proposed rules from the RRC would allow natural gas suppliers to sidestep weatherization by simply opting out of a critical infrastructure designation. The RRC has long been criticized for its intimate ties to the oil and gas industry; recently, the Commission used a list of nominees hand-selected by industry leaders to appoint 4 of its 5 seats to the Texas Energy Reliability Council.[43] It is perhaps then unsurprising that rules proposed thus far by the RRC do little to impose greater regulation or mandate weatherization. 

Only time will tell whether new rules’ resiliency standards combined with ERCOT’s biannual projections of extreme weather events will be adequate to prepare grid operators to manage the next major storm or draught. In analyzing why engineers made bad decisions that led to the Challenger explosion, Astronaut Alan Sheppard said “it’s the human element. I suggest that there’s a complacency there that comes from success.”[44] Perhaps Uri was a wake-up call to Texas’ comfortably complacent energy market. The next storm will reveal whether this session’s slate of legislation answered it sufficiently. 


Alessandra Papa is a 2L studying energy and environmental law. As TELJ’s Symposium Director, she produced the 2022 Symposium on Legal System Changes to Address Climate Change and the Energy Transition in conjunction with the Texas Bar’s ENRLS. She has also been selected to serve as Editor-in-Chief of Volume 53. Alessandra grew up in Fort Worth, Texas and received a B.S. in Geography from Texas A&M. Her background in geoscience informs her legal studies and she looks forward to a career advocating for renewable energy.


Alisha Mehta is an attorney in the Environmental and Legislative section of Jackson Walker’s Austin office. She focuses on permitting and water matters, including real estate developers and special utility districts and counsels clients on transactional and regulatory issues before the Public Utility Commission of Texas.


[1] Theresa Machemer, How Winter Storm Uri Impacted the United States, Smithsonian Magazine: Smart News (Feb. 19, 2021), https://www.smithsonianmag.com/smart-news/how-winter-storm-uri-has-impacted-us-180977055/.

[2] Id. 

[3] Tex. Dep’t of State Health Servs., Winter Storm-Related Deaths – July 13, 2021, Tex. Dep’t Health & Human Services: News Updates (Oct. 29, 2021), https://dshs.texas.gov/news/updates.shtm#wn.

[4] Machemer, supra note 1.

[5] Peter Cramton, Lessons From the 2021 Texas Electricity Crisis, Peter Cramton: Papers 2 (Sept. 6, 2021), http://www.cramton.umd.edu/papers2020-2024/cramton-lessons-from-the-2021-texas-electricity-crisis.pdf 

[6] Id.

[7] Neelam Bohra, Almost 70% of ERCOT Customers Lost Power During Winter Storm, Study Finds, The Tex. Trib.: Winter Storm 2021 (Mar. 29, 2021), https://www.texastribune.org/2021/03/29/texas-power-outage-ERCOT/.

[8] Aaron Rupar, Fox News Turns Winter Storm Uri Into a Cudgel to Own the Libs, Vox (Feb. 17, 2021, 3:25 PM EST), https://www.vox.com/2021/2/17/22287469/fox-news-winter-storm-uri-windmills-ercot-greg-abbott-hannity-carlson (quoting Tucker Carlson).

[9] Cramton, supra note 5, at 1.

[10] ERCOT, Update to April 6, 2021 Preliminary Report on Causes of Generator Outages and Derates During the February 2021 Extreme Cold Weather Event, Ercot Public 8 (Apr. 27, 2021), http://www.ercot.com/content/wcm /lists/226521/ERCOT_Winter_Storm_Generator_Outages_By_Cause_Updated_Report_4.27.21.pdf 

[11] ERCOT, Quick Facts, ERCOT 1 (Feb. 2018) http://www.ercot.com/content/wcm/lists/144926/ERCOT_Quick_ Facts_2518.pdf 

[12] Katie Shepherd, Rick Perry Says Texans Would Accept Even Longer Power Outages ‘To Keep the Federal Government Out of Their Business’, The Wash. Post (Feb. 18, 2021, 2:09 AM EST), https://www.washingtonpost.com/nation/2021/02/17/texas-abbott-wind-turbines-outages/.

[13] Cramton, supra note 5, at 1.

[14] Id. at 2.

[15] Cramton, supra note 5, at 8. 

[16] Shepherd, supra note 12.

[17] Dionne Searcey, No, Wind Farms Aren’t the Main Cause of the Texas Blackouts, The N.Y. Times (May 3, 2021), https://www.nytimes.com/2021/02/17/climate/texas-blackouts-disinformation.html.

[18] Cramton, supra note 5, at 8. 

[19] Id. at 18.

[20] James Osborne Et Al., Texas Grid Fails to Weatherize, Repeats Mistake Feds Cited 10 Years Ago, Houston Chronicle (Feb. 17, 2021, 2:25 PM), https://www.houstonchronicle.com/business/energy/article/Texas-grid-again-faces-scrutiny-over-cold-15955392.php.

[21] Jeffrey Ball, The Texas Blackout Is the Story of a Disaster Foretold, Texas Monthly (Feb. 9, 2021), https://www.texasmonthly.com/news-politics/texas-blackout-preventable/.

[22] Jay Root, Et Al., This Simple Paperwork Blunder Left Texans Cold During the Deadly Freeze, Houston Chronicle (Mar 18, 2021, 1:31 PM), https://www.houstonchronicle.com/politics/texas/article/Simple-paperwork-blunder-Texans-cold-winter-storm-16032163.php 

[23] Id.

[24]Neena Satija & Aaron Gregg, Ten Years Ago, 241 Texas Power Plants Couldn’t Take the Cold. Dozens of them Failed Again This Year., The Wash. Post (Mar 6, 2021, 9:55 AM),  https://www.washingtonpost.com/nation/ 2021/03/06/texas-power-plants/ 

[25] Osborn, supra note 20. 

[26] Matt Largey, Texas’ Power Grid Was 4 Minutes and 37 Seconds Away from Collapsing. Here’s How it Happened., KUT Austin (Feb. 24, 2021, 3:09 PM CST), https://www.kut.org/energy-environment/2021-02-24/texas-power-grid-was-4-minutes-and-37-seconds-away-from-collapsing-heres-how-it-happened.

[27] S. Res. Ctr., Bill Analysis, Tex. S. 87(R)-87R8893 JXC-F (Tex. 2021), https://capitol.texas.gov/tlodocs/87R/analysis/html/SB01278I.htm

[28] Id. 

[29] Shawn Mulcahy & Erin Douglas, Sweeping Legislation to Overhaul State’s Electricity Market in Response to Winter Storm Heads to Texas House After Senate’s Unanimous Approval, The Tex. Trib.: Tex. Legislature 2021 (Mar. 29, 2021, 7:00 PM CST), https://www.texastribune.org/2021/03/29/texas-senate-electricity-power/.

[30] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0

[31] Id. 

[32] Herman K. Trabish, ‘A Terrible Idea’: Texas Legislators Fight Over Renewables’ Role in Power Crisis, Aiming to Avert a Repeat, Utility Dive: Deep Dive (May 17, 2021), https://www.utilitydive.com/news/a-terrible-idea-fight-over-renewables-role-in-texas-february-power-cri/599842/.

[33] Id. 

[34] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0

[35] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0 (amending Utility Code § 39.159(b)(2)). )

[36] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0 (amending Utility Code §§ 39.159(b)(3) and 39.159(c)(1)). SB 3, amends utility code § 39.159 (b)(3) and (c)(1)

[37] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0 (amending Utility Code § 35.0021(b))

[38] S.B. 3, 87 Leg. (Tx. 2021) https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB00003F.pdf#navpanes=0 (amending Utility Code § 35.0021(d-e))

[39] S.B. 3, 87 Leg. (Tx. 2021), https://capitol.texas.gov/tlodocs/87R/billtext/pdf/SB01281F.pdf#navpanes=0 

[40] Texas Proposed Gas Regulations for Critical Infrastructure, RCP (Oct. 2021), https://rcp.com/texas-proposed-gas-regulations-for-critical-infrastructure/ 

[41] Root, supra note 22.

[42] Texas Proposed Gas Regulations for Critical Infrastructure, RCP (Oct. 2021), https://rcp.com/texas-proposed-gas-regulations-for-critical-infrastructure/

[43] Erin Douglas, Oil Industry Helped Handpick Members of Texas Advisory Group for Electric Grid Reliability, Emails Show,  The Tex. Trib. (Oct. 21, 2021, 4:00 AM), https://www.texastribune.org/2021/10/21/texas-railroad-commission-power-grid-council/ 

[44] Osborne, supra note 20.