Overall Vote Recommendation

Vote No; Amend

Principle Criteria

Free Enterprise

Property Rights

Personal Responsibility

Limited Government

Individual Liberty

Digest

SB 819 proposes a new subchapter (Subchapter F) to Chapter 35 of the Texas Utilities Code that establishes a public interest application process for large-scale renewable energy generation facilities. Specifically, the bill targets wind and solar power facilities with a capacity of 10 megawatts (MW) or more and requires such facilities to receive a "determination of public interest" from the Public Utility Commission (PUC) before interconnecting with a transmission facility. The purpose of this requirement is to provide state-level oversight to address potential environmental, land use, wildlife, and national security impacts associated with large renewable energy projects.

The legislation outlines the information an applicant must provide, including a detailed site plan, facility type, assumed business name, applicable power agreements under Chapters 301 or 302, and an affirmation that proper public notice has been provided. It also permits the inclusion of optional documentation, such as endorsements from local political subdivisions, environmental impact analyses, fire mitigation plans, and national security assurances. The PUC may also impose an application fee to cover administrative costs.

The bill exempts solar facilities located within the boundaries of a home-rule municipality, focusing instead on rural and exurban development where concerns about local environmental and infrastructure impacts are more prevalent. SB 819 further emphasizes the need to balance increasing electricity demand with environmental stewardship, private property rights, and responsible land use. It introduces a regulatory gatekeeping mechanism aimed at ensuring renewable energy facilities are developed in a manner that aligns with state and community interests.

The originally filed version of SB 819 established a renewable energy generation facility permitting system under Chapter 35 of the Texas Utilities Code. This version required that operators of wind or solar facilities with capacities of 10 MW or more obtain a permit from the Public Utility Commission (PUC) before connecting to the transmission grid. The bill detailed stringent setback requirements (e.g., 3,000 feet from neighboring property lines for wind facilities), mandatory public notice and meetings, and monitoring/reporting obligations. It also created an environmental impact review system through the Texas Parks and Wildlife Department and authorized the collection of annual environmental impact fees. Notably, the original bill prohibited local property tax abatements under Chapter 312 of the Tax Code for these facilities.

In contrast, the Committee Substitute for SB 819 significantly scaled back regulatory requirements. The substitute eliminates the term “permit” and instead requires developers to file an application for a “determination of public interest” prior to interconnection. This approach is procedurally lighter and avoids creating a new formal permitting regime. The substitute also removes mandatory setbacks, bond requirements, and prescribed conditions, instead allowing applicants to optionally submit supporting documents (e.g., environmental analyses, fire mitigation plans, local government support) to bolster their application. It retains the authority for the PUC to impose application fees but does not include an environmental impact scoring system or the associated fee-funded cleanup fund found in the original version.

Furthermore, the substitute bill does not include the property tax abatement prohibition that was part of the original bill. This omission may reflect a shift toward accommodating local economic development interests or a compromise with stakeholders. Lastly, the substitute version adds a broader legislative policy statement emphasizing the balance between property rights, electric generation needs, and environmental stewardship without codifying enforcement mechanisms that were present in the originally filed bill.

In sum, the Committee Substitute transitions SB 819 from a detailed, enforceable permitting framework with defined obligations and penalties to a more flexible, discretionary process focused on public interest review—effectively softening its regulatory posture while preserving state oversight of large-scale renewable projects.

Author

Lois Kolkhorst

Paul Bettencourt

Donna Campbell

Juan Hinojosa

Joan Huffman

Bryan Hughes

Phil King

Mayes Middleton

Tan Parker

Kevin Sparks

Co-Author

Brian Birdwell

Contact the Author

Sen. Lois Kolkhorst

Capitol Phone:

(512) 463-0118

Capitol Office:

CAP GE.4

E-Mail:

[email protected]

Visit Official Website

Fiscal Notes

According to the Legislative Budget Board (LBB), SB 819 would have no net fiscal impact on General Revenue-Related Funds over the biennium ending August 31, 2027. However, the bill would authorize the Public Utility Commission of Texas (PUC) to assess application fees sufficient to offset administrative expenses, thereby creating a revenue-neutral framework in practice.

To implement the bill’s requirements—specifically the application and review process for determining the public interest of large-scale renewable energy generation facilities—the PUC would need to add 14 full-time employees. These roles include attorneys, engineers, investigators, program specialists, a programmer, and the support staff necessary to conduct legal analysis, technical review, application processing, enforcement, and public communication. The associated annual cost for these positions is estimated at $1.9 million, but this would be offset by the application fees imposed on renewable energy developers, resulting in no net gain or loss to the General Revenue Fund.

The bill also includes minor technology expenditures of $37,800 per year for equipment and system development, particularly for an online portal to manage application submissions. Importantly, SB 819 does not directly appropriate funds but establishes the statutory authority for fee-based cost recovery, effectively allowing the Legislature to fund implementation through appropriations if necessary.

At the local level, counties and municipalities could experience minor administrative impacts, as county judges and local governing bodies must be notified of facility applications and may provide input during the review process. However, no significant fiscal burdens to local governments are anticipated. Overall, the bill establishes a new regulatory function for the PUC with a self-funding structure that avoids direct budgetary pressure on the state’s general revenue.

Vote Recommendation Notes

SB 819 seeks to establish a new application process through the Public Utility Commission (PUC) requiring renewable energy facilities of 10 megawatts or greater to receive a “public interest” determination before interconnecting with the grid. While the bill is a response to real and widespread concerns across rural Texas about the siting, transparency, and long-term impacts of wind and solar facilities, the framework it creates expands state authority over private development and introduces regulatory burdens that, in their current form, are too broad and not sufficiently tied to measurable public harms.

From a free market perspective, regulation of grid access can be justified when tied directly to a project’s impact on grid reliability or system costs. However, SB 819 grants the PUC broad discretion to deny interconnection without grounding that authority in specific technical criteria. Furthermore, it imposes state-mandated setbacks and procedural requirements on projects regardless of whether they receive taxpayer subsidies or incentives. This raises serious concerns about government overreach, especially when private actors are using private capital on private land.

The bill does make improvements from its originally filed version—it removes mandatory public meetings, restores local authority on tax abatements, and sets a timeline for agency decisions—but it still applies a subjective “public interest” standard and imposes new hurdles to development that are not applied evenly across the energy sector. If left unamended, the bill sets a troubling precedent for future land use regulation and state interference in voluntary, private energy investments.

Suggested Amendments:

Tie Regulation to Grid Reliability: Amend Section 35.203 to narrow the basis for denial of an application. Replace or supplement the vague “public interest” standard with objective, measurable criteria related specifically to grid reliability, stability, and operational impact.
Condition Setback Requirements on Subsidy Use: Amend Section 35.204 to apply setback mandates only to facilities that receive public subsidies (e.g., Chapter 312 abatements, federal tax credits). Allow unsubsidized, market-driven projects to determine siting through private negotiation and local land use agreements.
Introduce a Clear Appeals Process: Add a new section outlining a structured appeals mechanism for denied applications. Ensure applicants have access to an administrative hearing and the ability to challenge denials based on arbitrary or unsupported decisions. This reinforces due process and guards against regulatory abuse.
Require Transparency and Disclosure from the PUC: Amend Section 35.206 to include public reporting requirements. Require the PUC to publish its findings, methodology, and rationale whenever an application is denied. This adds accountability to the process and protects applicants from opaque or politically influenced decisions.
Limit Rulemaking Scope to Specific, Enumerated Areas: Amend Section 35.207 to constrain the PUC’s rulemaking authority. Prevents regulatory creep beyond the bill’s intended purpose.
Exempt Private, Off-Grid Projects: Add a provision exempting renewable facilities that are not seeking grid interconnection or not receiving public funds from these requirements. Protects innovation and investment on private land not reliant on public infrastructure.
Sunset Review Provision: Add a section subjecting Subchapter F to review by the Texas Sunset Advisory Commission after a set period (e.g., 6 years). Ensures the new regulatory framework is evaluated for effectiveness, fairness, and continued necessity.

Texas Policy Research recommends that lawmakers vote NO on SB 819 unless amended as described above. We support the idea that narrowly tailored, generation-neutral regulation could be appropriate when directly tied to the use of public resources—such as grid access or tax incentives. Targeted amendments could preserve grid stability and taxpayer interests without compromising liberty, property rights, or market competition.

Individual Liberty: The bill introduces a new regulatory gatekeeping process requiring individuals or businesses to receive state approval before interconnecting renewable energy facilities to the electric grid. This shifts decision-making power away from private actors and toward government regulators, limiting their freedom to invest, innovate, and operate without undue interference. The use of a broad, undefined "public interest" standard increases the risk of arbitrary or politicized decisions. Individuals are no longer free to act based solely on market forces and legal property rights; they must first seek government permission. Without clear limits or objective standards, this infringes on individual liberty by subjecting lawful economic activity to discretionary state approval.
Personal Responsibility: The bill implicitly encourages developers to consider community and environmental impacts through voluntary documentation (e.g., fire mitigation, environmental assessments). This can reflect an ethos of responsible development, especially in rural areas where tension with local landowners is high. However, because most of these provisions are optional, the bill neither strongly promotes nor undermines the principle of personal responsibility.
Free Enterprise: By imposing a new application process, potential interconnection delays, and default setback requirements, the bill introduces friction into the energy market—particularly for renewables. This impairs the open and competitive nature of Texas’s electricity sector, historically a model for market-based energy innovation. The bill singles out renewable generation for regulatory hurdles not applied to other energy sources unless amended. It risks distorting capital allocation by increasing regulatory uncertainty and compliance costs. The bill creates a barrier to entry and imposes non-market controls, conflicting with free enterprise principles.
Private Property Rights: Setback requirements of 100–200 feet for solar and 1,000 feet for wind from adjacent properties are imposed by default, regardless of whether the project is subsidized. This means landowners cannot fully utilize their own property for energy development without securing waivers or complying with state-mandated distances. While waivers are permitted, the state still places default restrictions on lawful, voluntary land uses. This sets a troubling precedent for state-imposed land use controls unrelated to safety or public subsidy—potentially opening the door to broader regulation of how land may be used.
Limited Government: The bill significantly expands the authority of the Public Utility Commission beyond its traditional role. It gives the agency discretionary power to deny grid access based on undefined criteria, authorizes rulemaking and enforcement, and places private market participants under new forms of state oversight. These are not sunset-limited or narrowly tailored powers. The bill creates a new bureaucratic process that, once established, could expand beyond its original scope. Rather than constraining government to its essential functions, the bill increases its reach and authority over private industry and land use.

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