The bill, H.B. No. 3374, proposes amendments to the Utilities Code in Texas, specifically adding Section 39.171, which addresses market distortions in electricity pricing caused by federal tax credits under 26 U.S.C. Section 45. The bill mandates that the Texas commission and the ERCOT independent system operator develop rules, operating procedures, and protocols aimed at eliminating or compensating for these distortions. It emphasizes that costs associated with the sale of electricity eligible for federal tax credits, particularly those affecting capacity during peak demand, should be borne by the parties responsible for imposing those costs.

Additionally, the bill requires the elimination of any existing rules or procedures that adjust electricity prices based on reserve levels and the value of lost load. This legislative change is intended to create a more equitable pricing structure in the ERCOT power region, ensuring that market dynamics are not adversely affected by federal incentives. The provisions of this act are set to take effect on September 1, 2025.

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