The Texas General Land Office, through its State Energy Marketing Program (SEMP), sells natural gas and electricity competitively to public entities lowering their costs and earning money for the Permanent School Fund (PSF).
Schools, cities, and other public retail customers have saved money on their power bills, while helping deposit millions in the PSF. The Texas Legislature authorized these sales to maximize revenues from the oil and gas royalties earned from state land. SEMP sells natural gas through the State Gas Program and electricity through the State Power Program.
Examples of Public Retail Customers:
- Independent School Districts
- Community, Junior & Technical Colleges
- Public Colleges and Universities
- State Agencies
- Municipal Utility Districts
- Other Local Government Agencies
- Military Bases
- Veterans Facilities
State Power Program
The State Power Program helps public customers save on their electricity bills by buying their electricity from the GLO.
Revenue earned by the program flows directly to the Texas Permanent School Fund helping pay for Texas public education. The State Power Program provides electricity to its customers through third-party retail electric providers.
SEMP Update May 30, 2019
Background: In 1999, the Texas Legislature passed legislation enacting a competitive energy marketplace. At the time, many were concerned about the fluctuating electricity market, and thus the GLO was tasked with providing a low-cost solution for government entities to soften the shock of deregulation. Since the original legislation was passed in the 79th legislature, the electric marketplace in Texas has stabilized.
What does HB 2263 do?
H.B. 2263 (86 R) gradually phases out the State Power Program over a five-year period and removes the GLO’s authorization to sell power directly to a public retail customer. Contracts in effect prior to May 17th, 2019 may be performed pursuant to their terms. No new contracts for the State Power Program will be accepted; however, existing contracts still in effect may be amended and extended. All public schools will be exempt from the gross receipts tax beginning in 2024 to level the playing field by providing tax relief for school districts not in the power program at that time. The legislation was signed into law on May 17th, 2019.
What Happens Now?
- No new customers will be accepted into the State Power Program.
- Existing contracts will be maintained until the date of the agreement expires.
- Existing contracts may be extended; however, the agreement may not be extended beyond 12/31/23.
- The final bill text can be found here.
- Electricity Sales Procedures
- Guidelines for Competitive Electricity Procurement
- Letter of Authorization (LOA)
- LOA Attachment / Meter Locations
State Gas Program
The State Gas Program helps public customers save money on their natural gas bills by buying gas from the GLO.
Revenue earned by the program flows directly to the Texas Permanent School Fund helping pay for Texas public education.
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