Tex. Utilities Code § 39.919

(a) The commission by rule shall establish goals in the ERCOT power region to reduce the average total residential load.

(b) The rules adopted under Subsection (a) must provide for the adoption of a program that:

(1) provides demand response participation to residential customers where reasonably available;

(2) promotes the use of smart metering technology;

(3) is capable of responding to an emergency energy alert about low operating reserves issued by the independent organization certified under Section 39.151 for the ERCOT power region;

(4) provides opportunities for demand response providers to contract with retail electric providers to provide demand response services;

(5) ensures the program does not impact the critical needs of vulnerable populations;

(6) facilitates the widespread deployment of smart responsive appliances and devices in a manner that enables the customer's appliance or device to be enrolled as part of a demand response product or plan offered by a retail electric provider;

(7) establishes the method by which the components of the ratio described by Subsection (c) are calculated for purposes of determining whether the goals described by Subsection (a) have been achieved;

(8) provides for achievement of demand reductions within both summer and winter seasons; and

(9) allows a retail electric provider that offers a demand response program under this section to obtain funding for the demand response program through an energy efficiency incentive program established under Section 39.905 if the program complies with commission requirements related to the evaluation, measurement, and verification of demand response programs adopted under Section 39.905.

(c) The goals described by Subsection (a) must be calculated as a ratio by dividing the amount of load reduced at peak demand by the total amount of demand, at the same time, of all residential customers who have responsive appliances or devices at their premises that reduce the electric consumption of the customers.

(d) A transmission and distribution utility required to provide an energy efficiency incentive program under Section 39.905 may use up to 10 percent of the budgeted spending for demand response programs on the programs described by Subsection (b)(9).