Texas regulators have opened a public comment period on a proposed rule governing energy storage contracts, drawing both support for grid reliability and concern over security risks.
The Public Utility Commission of Texas proposed a new rule, 16 TAC §25.58, that would allow transmission and distribution utilities to contract with power generation companies for electric energy storage capacity, according to the Texas Register filing.
The filing says the rule is intended to “ensure reliable service to distribution customers” by enabling utilities to access stored energy during periods of high demand or grid stress. The filing states there would be “no probable economic cost” to persons required to comply with the rule and no fiscal implications for state or local government over the first five years.
The proposal formally opens a public comment window through May 18, 2026, with the possibility of a hearing if requested. Regulators are specifically seeking input on whether utilities should recover those costs only in base-rate cases or also in interim proceedings, and how certain lease-treatment standards should apply.
Supporters of battery energy storage systems, often referred to as BESS, have argued that such infrastructure can help stabilize intermittent power sources like wind and solar by storing excess energy and releasing it when needed.
“Battery Energy Storage Systems allow you to engage in energy arbitrage. With BESS, you buy your energy during off-peak hours when grid prices are lowest, store it, and use it during peak hours,” the website for BESS company Engie North America states. “When coupled with on-site wind or solar power plants, BESS enable you to maximize the value of the electricity produced from such renewable sources, contributing to a certain extent to reducing the cost of energy both at the wholesale level and hence reflecting it on electricity bills.”
Critics say battery storage projects still raise unresolved safety and supply-chain security questions, concerns likely to resurface during the public comment period.
Nancy White, a Texas activist who has previously raised alarms about foreign-linked components in battery storage projects, criticized the proposal in a text to The Dallas Express.
“The technology is not ready. When a critical resource has to rely on critical components from a foreign enemy to operate, and ERCOT confirms that there are no boots on the ground confirming security, we are endangering our way of life in Texas,” White said. “Until we have proper boots on the ground ensuring the security of our grid, then we should not be allowing more builds to interconnect to this CRITICAL resource.”
White’s concerns echo issues previously reported by The Dallas Express regarding a planned battery storage project in Fannin County. In a November 28, 2025, investigation, documents were alleged to tie components of an ENGIE project to Contemporary Amperex Technology Co. Ltd. (CATL), a company that Texas Attorney General Ken Paxton has said could pose risks due to alleged links to Chinese military-affiliated programs, DX reported.
ENGIE has stated it complies with all applicable laws and has not been notified of any violations, according to prior reporting.
Beyond security concerns, some residents and activists have also reportedly pointed to safety risks, including high-temperature battery fires and environmental impacts, citing incidents at other storage facilities nationwide.
The proposed rule outlines multiple safeguards, including a requirement for competitive bidding, commission oversight of contracts, and the ability for regulators to review cost-effectiveness compared to traditional infrastructure. It also allows regulators to conduct confidential inspections of contracts and requires storage operators to meet performance obligations or face financial penalties.
The entry in the state register contends that the framework is designed to balance reliability needs with oversight, but the open comment period is expected to draw continued scrutiny from both industry stakeholders and community groups.
The commission has indicated it will weigh submitted comments on both costs and benefits before deciding whether to adopt or modify the rule.
