Relating to critical infrastructure and utilities, including affiliation with certain foreign entities of certain persons working or participating in the electricity market; authorizing and increasing administrative penalties.

Contracts

You must immediately revise all Master Service Agreements (MSAs) and vendor contracts for critical grid equipment.

• Indemnification: Insert clauses requiring vendors to indemnify your entity for the full $1,000,000 penalty if their attestation regarding foreign ownership proves false.
• Termination Rights: Include an immediate "for cause" termination right triggered by an ERCOT flag or OAG investigation, bypassing standard cure periods.
• Warranties: Vendors must explicitly warrant they are not a restricted entity under Business & Commerce Code Chapter 117.

Hiring/Training

• Procurement Training: Purchasing agents must be trained to screen all vendors against the Chapter 117 prohibited jurisdiction list before issuing Purchase Orders.
• HR Screening: For positions deemed "critical to grid security," HR must implement pre-employment screening regarding travel to or relationships with prohibited nations (China, Russia, Iran, North Korea).

Reporting & Record-Keeping

• The "No-Access" Log: If you purchase equipment from a restricted entity (where legal), you must maintain a technical log proving the vendor has no remote access or control capabilities.
• Attestation Files: You must collect and store sworn affidavits from all critical vendors confirming their ownership structure.
• ERCOT Filings: Prepare for new mandatory attestations during your annual or periodic ERCOT registration renewal.

Fees & Costs

• Penalty Exposure: The statutory cap has increased 40x, from $25,000 to $1,000,000 per violation.
• Insurance Impact: Review D&O and Regulatory Liability policies; insurers may classify these penalties as uninsurable "national security" exclusions.