The Texas energy landscape is in constant motion. With rapid population growth, increasing integration of renewable energy, and the unique challenges of an isolated grid, ERCOT faces an evolving demand for flexibility. Senate Bill 1699 (SB 1699) emerges as a pivotal development for Retail Electric Providers (REPs), introducing new opportunities for residential demand response (DR) and distributed energy resource (DER) aggregation.

But this isn’t just another regulatory update to monitor. While participation in SB 1699-driven demand response programs is currently voluntary for REPs, taking action today offers significant, tangible benefits that strategically position your company for the grid’s inevitable future, far outweighing a “wait and see” approach.

Here are three compelling reasons why your REP should act on SB 1699 now.

Reason 1: The Financial Incentive

SB 1699 isn’t just about compliance; it’s about optimizing your REP’s balance sheet for a new era. The bill creates a clear financial pathway for REPs to generate new revenue by enabling residential customers to participate in DR programs and by aggregating their DERs for wholesale market opportunities.

As ERCOT’s grid needs evolve, the value of flexible resources is expanding beyond just scorching summer peaks. Recent analyses, including by Aurora Energy Research, highlight growing reliability concerns even during the “shoulder seasons” of spring and fall. These periods, characterized by volatile weather and the need for greater grid flexibility, present continuous opportunities for REPs to provide responsive capacity, earn incentives, and contribute to grid stability year-round. By empowering your customers to manage their energy use dynamically, you tap into a consistent, new revenue stream that directly addresses these critical grid needs.

Reason 2: The Strategic Necessity

While participation is voluntary today, the strategic imperative of SB 1699 is undeniable. The Public Utility Commission of Texas (PUCT) is mandated to establish rules and set specific goals for residential DR (rules adopted December 2024, Docket No. 56966). This signals an inevitable direction towards greater integration of demand-side resources into ERCOT’s operations. The grid needs more flexible resources now, and will only need more in the future with Aurora Energy Research projecting significant potential load-shedding events by 2030 if demand swings are not met with adequate flexible capacity.

Acting now allows your REP to proactively gain invaluable operational experience, build or fine-tune leading demand response programs, and establish expertise in this critical area. This positions your company to not only adapt seamlessly to future grid requirements but also to lead the charge, securing a significant competitive edge before broader industry shifts compel action. You’ll be building capabilities today that are essential for tomorrow’s grid.

Reason 3: The Relationship Advantage

In today’s competitive energy market, customer relationships are paramount. SB 1699 offers a unique opportunity to transform your REP from a commodity provider into a strategic energy partner for your customers. By providing innovative residential DR and DER aggregation programs, you empower them with more control over their energy use, the ability to save on bills through incentives, and a direct role in Texas’s energy future.

Studies and industry insights consistently show that customers engaged in such programs report higher satisfaction, greater awareness of their energy patterns, and increased receptivity to other energy management services. By offering avenues for participation, cost savings, and a role in grid stability, REPs can transform customer relationships, fostering greater loyalty and market differentiation. It’s about creating a tangible, positive experience that resonates with modern energy consumers and solidifies their long-term commitment to your brand. Don’t wait for competitors to build these deeper connections first.

Seize the Moment, Secure Your Future

The convergence of SB 1699’s financial incentives, ERCOT’s evolving reliability needs, and the opportunity for enhanced customer engagement creates a compelling case for immediate action. Don’t wait for future mandates to materialize. By proactively investing in intelligent demand response and DER aggregation solutions now, your REP can unlock new revenue streams, strengthen grid resilience year-round, and secure a significant competitive advantage through deeper customer relationships.

As you consider these opportunities, a critical decision will emerge: how to best implement these new capabilities, whether through internal development or by leveraging specialized external partnerships for rapid, robust deployment.

We’re covering this and more in our Insight Paper. Download “The SB 1699 Playbook for ERCOT REPs: Turning Voluntary Compliance into a Significant, Year-Round Revenue Stream for Grid Resilience” for deeper insights.

Want to discuss a tailored strategy for your REP? Schedule a meeting with our expert, Spencer Borison, who will be attending the Infocast Texas Clean Energy Summit in Austin (August 26-28, 2025).