Texas Sen. Kirk Watson has filed a bill (SB 1284) aimed at encouraging demand response in ERCOT.

The filed language for the bill includes few specific mandates or mechanisms, and would delegate to the Public Utility Commission authority to implement enumerated broad goals

Notably, the bill contemplates that entities other than retail electric providers may act as demand response providers, opening up a host of cost and benefit allocation issues

The bill would provide that it is the, "policy of this state to promote the development of demand response to its maximum potential and to eliminate unnecessary barriers to demand response participation in ERCOT."

Among other things, the bill would require the PUC to, by rule:

• Promote development of demand response participation by customers in all customer classes;

• Remove barriers to demand response participation for demand response providers and for customers in all customer classes;

• Ensure that customers in all customer classes have the option to contract for participation in demand response either directly with one or more demand response providers, including retail electric providers, with scheduling entities qualified by the independent system operator, or with a combination of entities consisting of the independent system operator and one or more demand response providers;

• Establish and encourage markets, products, programs, or services for reliability demand response and other forms of demand response in wholesale and retail markets; and

• Provide opportunities for demand response providers and customers to participate in wholesale energy markets and ancillary services markets on a comparable basis with other resources, while accommodating differences in operational capabilities of various customer loads among customer classes, including but not limited to differences related to availability, dispatch notification timelines, curtailment response times, ramp rates, curtailment duration, and times required to return to service following an outage.

Link to SB 1284