Lucio, Holland: Texas lawmakers considering smart grid policy for a stronger economy

Texas stands at a pivotal moment in its economic development, with the reliability and efficiency of its electrical grid playing a critical role in sustaining growth and attracting investment. Two legislative proposals—House Bills 3069 (HB 3069) and 5200 (HB 5200)—are moving through the Legislature and offer strategic opportunities to bolster the state’s energy infrastructure, ensuring a more robust and stable grid that underpins economic prosperity.

Representative Drew Darby’s HB 3069 aims to ensure that new transmission investments are not only necessary, but also economically sound by refining the planning process for transmission projects that create savings for Texans. The bill requires the Public Utility Commission (PUC) to establish criteria that include a comprehensive comparison over a period of at least ten years between the estimated costs of transmission projects and the anticipated congestion cost savings for consumers. Ultimately, this approach makes certain Texas is promoting prudent investments that enhance grid performance and support the state’s economic development goals.

This reform is especially critical as Texas continues to lead the nation in both population growth and industrial expansion. From advanced manufacturing to data centers, businesses are increasingly dependent on a reliable, affordable power supply. HB 3069 helps ensure that the grid can scale smartly alongside this growth, without saddling consumers with unnecessary costs or delays.

HB 5200, filed by Representative Rafael Anchia, seeks to increase transmission capacity, reduce system congestion, enhance electric reliability, and mitigate wildfire risks through integrating proven technologies. Specifically, the bill defines and promotes the use of grid-enhancing technologies and high-performance conductors within the ERCOT power region, including tools such as dynamic line rating systems, advanced power flow controllers, and topology optimization systems. By embracing innovation, Texas can boost energy resilience and signal to businesses that it remains a premier destination for reliable, forward-looking infrastructure.

These technologies have already been successfully deployed in other markets to increase capacity quickly and cost-effectively without the need for large-scale new construction. Their adoption in Texas would unlock latent capacity within the existing grid and allow faster deployment of clean, dispatchable, and distributed energy resources. At a time of rising energy demand, it’s an urgently needed step, and it sends a clear market signal that Texas both welcomes innovation and is committed to building an electric grid that keeps pace with 21st-century needs.

Taken together, these bills represent a comprehensive strategy to modernize Texas’s electrical grid. By systematically eliminating transmission constraints, ensuring economic justification for new projects, and integrating advanced technologies, the state can create a more reliable and efficient energy infrastructure. This modernization is essential for supporting existing industries, attracting new investments, and meeting the growing energy demands of a dynamic economy. A stable and robust grid reduces operational risks for businesses, lowers energy costs for consumers, and enhances Texas’s overall competitiveness in the global market. The recent bipartisan passage of both bills in the House underscores the Legislature’s recognition of the urgency and importance of addressing these challenges.

As Texas competes on a national and global scale, modernizing our energy backbone is not just a utility issue—it’s a core driver of long-term economic competitiveness and resilience. Without bold action, the state risks falling behind other energy leaders who are already advancing smarter, faster grid solutions. This proposed legislation embodies a forward-thinking approach to energy management, directly linking grid stability with economic vitality. By enacting these measures, Texas not only addresses current energy challenges but also lays the groundwork for sustained economic growth and leadership in the energy sector.

Editor’s Note: The above guest column was penned by former Texas state Representatives Eddie Lucio, III, and Justin Holland. Lucio is a lobbyist for the Texas Transmission Project and served in the Texas House of Representatives (D-Harlingen) from 2007 to 2022. Holland is senior advisor to the Texas Transmission Project and served in the Texas House of Representatives (R-Rockwall) from 2017 to 2025.

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