The 89th Session’s Legacy: Wins, Losses, and the Path Ahead for Texas Energy
Disclaimer: While most of the passed legislation mentioned in this article is anticipated to become law, the Governor of Texas has until June 22nd to exercise veto authority on any bill passed during the 89th Legislative Session.
The 89th Legislative Session reaffirmed Texas’ energy leadership with a suite of bills addressing the grid, emerging technologies, global competitiveness, infrastructure resilience, and consumer protection. Yet, beneath this surface of innovation and leadership lies a strong undercurrent that threatens to undermine the state’s true all-of-the-above energy strategy.
Echoing the 88th Legislative Session, numerous measures were introduced that would disrupt a history of technology-neutral state energy policy and dilute the deeply Texan competitive market principles that have led to energy abundance and affordability. This dichotomy sends a clear signal: Texas’ strategic position as an energy powerhouse, while intact, will continue to face intensifying challenges as debates around free markets, environmental stewardship, and global competitiveness grow.
This session, nearly sixty lawmakers from both sides of the aisle in the Texas House and Senate came together in support of a shared vision for the state’s energy future. As members of the Texas Energy and Climate Caucus, policymakers rallied around five core priorities:
● strengthening grid reliability and resiliency,
● advancing energy innovation and workforce development,
● preserving Texas energy’s global leadership,
● investing in critical energy-water infrastructure, and
● keeping energy affordable for consumers.
At the heart of this effort was the Caucus’ ten-member Bipartisan Policy Committee. This dedicated group guided the Caucus by hosting open, productive policy discussions and diving deep into the details of proposed legislation. After reviewing dozens of bills, members built consensus and shared thoughtful vote recommendations with the full caucus. The Committee members must be unanimous in their positions before providing a vote recommendation to the general caucus membership.
So, what was the outcome of all of this work? What will be the legacy of the 89th Legislative Session and the Texas Energy and Climate Caucus? Below, we explore those questions and what this means for the Texas energy economy.
Legislators Bolster Grid Reliability and Security.
The 89th session demonstrated policymakers’ ongoing commitment to grid security and reliability. To fortify grid resilience against weather, cyber, and physical threats, lawmakers passed SB 75 (Hall), which establishes the Texas Grid Security Commission. SB 1789 (Schwertner) further advances reliability standards for electric providers and empowers the Public Utility Commission to hold utilities accountable for service lapses, while HB 1584 (Hull), borne out of Hurricane Beryl, obligates electric utilities to maintain up-to-date lists of priority public safety facilities like hospitals, ensuring restoration crews know which sites demand top priority. HB 3824 (King) establishes fire safety and emergency operations standards for battery energy storage facilities, aiming to preempt local bans that could stall deployment of these resilience assets.
This session also delivered some gains for demand-side solutions. SB 783 (Menéndez) empowers the State Energy Conservation Office (SECO) to update building codes for new construction, bolstering energy and water use efficiency, while HB 5323 (King) establishes the Texas Energy Waste Advisory Council, which is tasked with coordinating interagency programs to reduce energy waste, increase energy efficiency, and enhance demand response. Both bills were endorsed by the Texas Energy and Climate Caucus Policy Committee—a powerful bipartisan signal of support.
Together, these measures mark a shift: reliability is no longer an afterthought in Texas’ energy system—it’s an imperative. These efforts align with Texas policymakers' commitment to ensure that the electric grid remains robust and adaptive.
Innovative and Emerging Energy Technologies Receive Bipartisan Support.
In a nod to energy innovation and leadership, lawmakers took steps to support emerging technologies holistically, reducing red tape and building the pipeline of skilled workers needed to realize their potential.
HB 14 (Harris) reinforces Texas’ nuclear ambitions and establishes the Texas Advanced Nuclear Energy Office to provide strategic leadership, grant funding, and permitting coordination for modern nuclear technologies, including generation III/IV reactors, small modular reactors (SMRs), microreactors, and associated supply-chain technologies. To shore up the skilled workforce of the future, SB 1535 (Zaffirini, Parker) directs the Texas Workforce Commission to establish an advanced nuclear energy workforce program—a progressive step that anticipates modern nuclear deployments in the coming decades and ensures the state is prepared. The Policy Committee endorsed the bill.
Regarded as a win for the geothermal industry, SB 879 (Birdwell) streamlines permitting for closed-loop geothermal systems by exempting low-risk projects from onerous drilling regulations under the Railroad Commission.
Taken together, these pieces of legislation signal Texas’ practical energy ethos: welcome and cultivate new energy resources but temper growth with measured guardrails.
Lawmakers Improve Consumer Protections and Affordable Energy.
The 89th Legislative Session clearly affirmed Texans’ right to affordable energy from reliable providers, coupled with access to transparent and trustworthy information. By granting the Office of Public Utility Counsel expanded access to market data (SB 1877, Schwertner/Barry) and requiring standalone, transparent rate filings from utilities (SB 1664, Schwertner), the legislature enhanced the tools designed to keep utility bills in check.
To remove barriers to distributed energy resource deployment, SB 1252 (Schwertner) preempts inconsistent local bans on home backup systems, preserving consumer choice and energy independence, while SB 1202 (King) streamlines deployment by allowing third-party inspections for home backup power installations. The Policy Committee endorsed SB 1202.
SB 1697 (Zaffirini) directs the Public Utility Commission to publish a comprehensive customer guide to rooftop solar, and SB 1036 (Zaffirini) strengthens oversight of residential solar transactions through occupational registration and penalties to protect consumers from bad actors. Both bills aim to modernize the solar market and safeguard consumers. The Policy Committee endorsed SB 1036.
The outlook is largely positive for residential rooftop solar, with one exception: HB 912 (Moody) delays net metering compensation reform for distributed renewable owners outside ERCOT until 2026, creating uncertainty that may hinder solar adoption in those areas.
At the Energy-Water Nexus, Lawmakers Tackle Produced Water.
As Texas contends with prolonged droughts, increasingly numerous competing uses for water resources (including energy supply), the importance of sound policy cannot be overstated. During the 89th Legislature, lawmakers sought to address one of the most long-lived challenges at the nexus of water and energy: produced water.
Produced water is a byproduct of oil and mining operations and contains numerous substances that make it challenging to reuse. SB 1145 (Birdwell, Sparks) empowers the Texas Commission on Environmental Quality to permit the application of treated produced water from mining and oil and gas operations on land, transforming an environmental burden into a reusable resource for industrial or agricultural needs.
Legislators Strengthen Texas Energy’s Global Competitiveness.
Texas’ energy industry is globally dominant, and this success rests on its unmatched diversity, harnessing the full spectrum of energy assets, from oil and gas legacies to established renewables and emerging resources. The 89th Legislative Session doubled down on global competitiveness with outcomes that protect and progress multiple facets of the state’s energy industry.
To bolster the reliability and safety of traditional resources, policymakers extended Good Samaritan liability protections to first responders who engage in oil and gas crises (SB 1759, Birdwell). The Texas Railroad Commission can designate private operators for orphaned wells, streamlining cleanup and limiting state liability (SB 1762, Blanco), and the Governor may expand interstate export markets for liquified natural gas (HB 2890, Patterson). SB 2268 (Schwertner) ensures the Texas Energy Fund can continue awarding loans and grants to energy projects amidst economic uncertainty, and SB 1150 (Middleton) closes a policy gap that contributed to an increasing number of orphaned or abandoned unplugged oil and gas wells.
Additionally, a slate of bills introduced new recycling and decommissioning mandates for wind, solar, and battery projects, elevating best business practices, enhancing public trust, and positioning Texas’ clean energy sector for long-term competitiveness. Industry largely supported these measures, and HB 3228 (Lambert), HB 3229 (Lambert), and HB 3809 (Darby) passed through the legislature.
Policymakers Safeguard an All-of-the-Above Energy Strategy.
Lawmakers strengthened Texas’ global energy competitiveness not only by passing supportive energy policies but also by rejecting proposals misaligned with the state’s successful all-of-the-above energy strategy.
Through education and consistent engagement, the Texas Energy and Climate Caucus played a pivotal role in pulling back the curtain on policy proposals that would have had a negative effect on Texas energy. Ultimately, a number of bills opposed by the Caucus failed to advance, a testament to the power of bipartisan collaboration.
Several bills that would have undermined competition and innovation in the renewable energy sector were rejected. These included:
● a ban on offshore wind development (SB 383, Middleton),
● restrictions on new renewable energy siting (SB 819, Kolkhorst),
● retroactive requirements and penalties for renewable generation through mandated firming (SB 715, Sparks), and
● a requirement for a 50% dispatchable energy portfolio (SB 388, King).
The legislature did end up passing a measure that adds an additional layer of environmental review and compliance for wind projects near National Wildlife Refuges in Gulf Coast counties (HB 3556, Vasut), although significant improvements were made to the bill prior to passage. The Governor will decide if HB 3556 becomes law.
Proposals aimed at limiting emissions and consumer choice also failed to gain traction. These included a ban on carbon taxes (HJR 138, Alders), prohibiting emissions tracking (HB 4049, Lopez, Janie), and blocking public funding for emissions reduction efforts (HB 4313, Bell, Cecil). Finally, burdensome rules for distributed energy resources (DERs), as proposed in SB 2021 (Johnson), were sidelined, preserving opportunities for innovation in customer-driven generation.
Lastly, efforts to ban the use of environmental, social, and governance (ESG) factors in insurance and banking decisions, such as SB 945 and SB 946 (Hughes), were ultimately set aside, preserving flexibility in financial risk management.
The 89th Legislature’s decisions, shaped by vocal, pragmatic opposition from the Texas Energy and Climate Caucus, upheld the competitive market principles that underpin Texas’ global energy dominance.
Opportunities for the next legislative session.
Transmission
While the 89th Legislative Session delivered tangible and positive progress across the energy ecosystem, lawmakers left a few prudent proposals on the table, marking missed opportunities for the state’s continued global competitiveness. For instance, bills aimed at addressing critical transmission constraints in the Permian Basin (HB 2152, Morales, Eddie; HB 3044, Darby; HB 3069, Darby) would have alleviated congestion on the grid and unlocked new capacity for the region’s booming energy sector, but ultimately did not advance. A proposal to leverage advanced grid-enhancing technologies to get the most out of existing energy infrastructure (HB 5200, Anchía) was dismissed, despite its promise to unlock significant system-wide efficiency gains.
Geothermal and Hydrogen
Similarly, measures supporting geothermal innovation through workforce development and the establishment of a policy council (HB 3125, HB 3240, Guerra) would have further positioned Texas as a leader in next-generation geothermal energy. A bill to provide incentives for clean hydrogen development (HB 5600, McLaughlin) was not passed, leaving a gap in Texas’s efforts to diversify its energy portfolio and lead in emerging clean fuel markets.
Energy Efficiency
A proposal to create the Texas Energy Efficiency Council and foster demand-side strategies for grid reliability (HB 3826, Hernandez) did not advance, nor did a measure to improve energy efficiency in residential construction by limiting electric resistance heating (HB 4016, Anchía).
Each of these missed opportunities signals the continued need for ongoing engagement and advocacy to ensure that Texas’ energy policies remain forward-thinking and competitive. When the gavel drops on the next legislative session, the Texas Energy and Climate Caucus will be right there, working tirelessly to champion the policies that keep Texas at the forefront of energy innovation and leadership.
Acknowledgements
This work would not be possible without the extraordinary efforts of the Texas Energy and Climate Caucus Executive Committee, the Policy Committee, and our dedicated staff. Thank you all for a successful and impactful 89th Legislative Session.
Executive Committee Members
Chair, Rep. Erin Zwiener
Vice-Chair, Rep. Drew Darby
Second Vice-Chair, Senator Nathan Johnson
Secretary, Rep. Gary Gates
Treasurer, Rep. Penny Morales Shaw
Policy Committee Members
Chair, Rep. Eddie Morales
Rep. Ryan Guillen
Rep. Rafael Anchía
Sen. Nathan Johnson
Rep. Jeff Barry
Rep. John McQueeney
Rep. Charles Cunningham
Rep. Penny Morales-Shaw
Rep. Paul Dyson
Rep. Charlene Ward Johnson
Caucus Staff
Patricia Zavala, Executive Director
Jimmy Counihan, Policy and Comms Manager
Coleman Nickum, Energy Policy Fellow
Micalah Spenrath, Policy Consultant
Bhavik Menon, Intern
Joshua Bober, Intern
If you’d like to learn about how you can support the Texas Energy and Climate Caucus, please visit us at https://www.texasclimatecaucus.com.
