H.B. No. 3402 aims to enhance risk mitigation planning and liability management for electric service providers in Texas, particularly concerning wildfire risks. The bill amends Section 36.064 of the Utilities Code, allowing electric utilities to self-insure against potential liabilities and catastrophic property losses, including those from wildfires. It introduces new criteria for the approval of self-insurance plans by the commission, emphasizing the need to consider wildfire loss potential and historical data. Additionally, it specifies that utilities cannot self-insure for damages caused by wildfires if they acted intentionally, recklessly, or with gross negligence.

The bill also adds Section 38.080 to the Utilities Code, mandating that electric utilities and cooperatives in wildfire risk areas file a wildfire mitigation plan with the commission. This plan must include details on vegetation management, operations to reduce wildfire ignition, and community outreach efforts. The commission is required to approve or modify these plans within 60 days, and utilities with approved plans are granted an affirmative defense against liability for damages from wildfires, provided they comply with their plans. The act is set to take effect immediately upon a two-thirds vote or on September 1, 2025, if that threshold is not met.

Statutes affected:
Introduced: Utilities Code 36.064 (Utilities Code 36)