According to the Legislative Budget Board (LBB), HB 1710 would have no significant fiscal implications for the State. The evaluation assumes that any administrative or operational costs incurred by the Public Utility Commission of Texas (PUC) to implement the bill’s requirements can be absorbed within the agency’s existing budget and resources.

Specifically, while the bill introduces a new requirement for entities to obtain a Certificate of Convenience and Necessity (CCN) from the PUC for facilities that enable the import or export of electricity across the ERCOT boundary, this is not expected to create a material increase in workload or require additional staffing or funding. The PUC is already tasked with processing CCNs and evaluating public interest determinations under existing law, and this bill is seen as an extension of those responsibilities rather than a significant new mandate.

At the local government level, the bill is also expected to have no significant fiscal impact. Local entities do not play a direct role in the CCN application or interconnection approval processes covered by this legislation, and therefore are unlikely to bear any costs related to its implementation.

In summary, HB 1710 is structured in a way that enables the state to manage new regulatory functions within its current operational capacity, and does not pose financial risk or burden to local government units.

The Committee Substitute version of HB 1710 presents a significant departure from the strong stance taken in the original bill, which outright prohibited any interconnection that would subject ERCOT to the jurisdiction of the Federal Energy Regulatory Commission (FERC). The substitute, however, permits such interconnections if they are approved by FERC under select provisions of federal law and found to be in the “public interest” by the Public Utility Commission of Texas (PUC). This framework introduces ambiguity, complexity, and—most importantly—a legal and procedural opening for federal regulatory influence over Texas’s otherwise independent grid.

For those who strongly support the continued regulatory and operational independence of ERCOT, the current language of the bill fails to deliver the necessary protections. The "public interest" standard is inherently subjective and susceptible to shifting political winds, especially in the hands of future PUC commissioners or gubernatorial administrations. While the bill tries to strike a balance between energy market flexibility and grid sovereignty, it ultimately does not provide the bright-line prohibition necessary to safeguard against federal encroachment. It is conceivable that what is deemed “in the public interest” one year could become the justification for interconnection projects that weaken ERCOT's autonomy the next.

Additionally, the bill increases the scope and discretion of state government by giving the PUC expanded authority over interconnection approvals, a role it has not previously exercised in this form. While the fiscal note indicates no significant cost to the state or local governments, the regulatory burden placed on market participants grows substantially. Entities will now have to navigate both FERC and PUC processes, injecting greater uncertainty and delay into potential infrastructure development. This runs counter to the liberty principles of limited government and free enterprise, particularly in the historically deregulated Texas electricity market.

Moreover, while the bill author’s stated intent is to prevent any future interconnections from subjecting the Texas grid to federal regulation, the language of the committee substitute contradicts that purpose. By expressly allowing interconnections under Sections 210, 211, or 212 of the Federal Power Act—and disallowing only Sections 203, 205, and 206—the bill in effect authorizes a specific kind of federal regulatory involvement in ERCOT. It does not eliminate FERC's role; it defines and permits it. This represents a structural policy shift that invites federal engagement through the very legal means it claims to avoid.

The bill also introduces a durable legal framework for regulated interconnection—something that does not currently exist in this form. Even with guardrails, this opens the door for gradual expansion of interconnectivity over time. That is a critical change: today, ERCOT’s insulation is preserved through absthe ence of enabling policy; under HB 1710, it would instead rely on the discretion of future regulators, rulemaking, and subjective public interest findings. That is not a firewall—it is a policy invitation with conditions.

If the ultimate goal is to preserve ERCOT’s isolation and protect Texas from being swept into the broader federal energy regulatory regime, then any legislation that provides a legal framework for interconnection, even conditionally, is counterproductive. It would be more prudent to uphold the original intent of the filed bill or take no legislative action at all, rather than advance a policy that weakens the state’s position under the guise of regulation.

For these reasons, Texas Policy Research recommends a NO vote on HB 1710. The bill fails to meet the necessary threshold for protecting grid sovereignty, introduces expansive and discretionary regulatory oversight, and deviates from the principled stand Texas must maintain if it wishes to preserve full control over its power infrastructure. A clear NO vote reaffirms the Legislature’s commitment to protecting the ERCOT grid from any and all forms of federal interference.

• Individual Liberty: The bill does not directly restrict personal freedoms like speech, religion, or due process, but it impacts individual liberty indirectly by reducing the ability of private actors—landowners, infrastructure developers, and energy entrepreneurs—to engage in voluntary transactions involving cross-grid interconnection. By introducing layers of state and federal approval for these actions, the bill reduces freedom of association and enterprise in the electricity market.
• Personal Responsibility: The bill does not directly alter incentives for individuals to act responsibly, nor does it impose mandates on citizens. However, by shifting decision-making power to state agencies like the Public Utility Commission of Texas (PUC), the bill subtly reduces the role of private risk-taking and stewardship in grid development. When the state becomes the ultimate arbiter of what’s in the “public interest,” personal initiative and responsibility are inherently displaced.
• Free Enterprise: The bill imposes significant new constraints on free enterprise by creating a regulatory gateway for cross-grid interconnections. Requiring both a PUC certificate and FERC approval (under specific sections of the Federal Power Act) raises the costs, delays, and risk associated with pursuing infrastructure projects that might enhance energy innovation or consumer access to diversified supply. The addition of a subjective “public interest” determination amplifies regulatory uncertainty, discouraging competition and market participation, especially from smaller or independent energy developers.
• Private Property Rights: Although the bill does not authorize eminent domain or government takings, it restricts how property owners may use energy infrastructure they build, own, or operate. If a landowner or developer constructs a facility capable of interconnecting to another grid, that facility cannot operate unless the state approves it via discretionary regulatory review. This significantly reduces the utility and autonomy of private capital and land use, infringing on the right to freely leverage one's property for lawful commercial purposes.
• Limited Government: While the bill’s intent is to keep federal government involvement in check, it grows the size and scope of state government in the process. It grants the PUC new authority to review, approve, and conditionally allow cross-border interconnections—an area where the PUC previously had no discretionary control of this kind. The bill also codifies a role for FERC (albeit limited to specific statutory sections), which paradoxically invites the very federal involvement it aims to restrain. This is inconsistent with the principle that government power should be minimal, clearly defined, and used only when absolutely necessary.