TEXAS ENERGY AMBIGUITY

By TONY PARADISO Principal, E3

ENERGYCENTRAL - Jun 5, 2023 -  In mid-May I published a post that summarized changes being promoted by the Texas legislature to increase natural gas use and hamstring new renewable development. The outcome remained in doubt up until the final hours of the legislative session.

Opposing the most harmful provisions was a coalition of over 50 chambers of commerce, trade groups, environmentalists and industrial organizations – including oil and gas interests. But other forces were also in play.

According to University of Texas analysis firm IdeaSmiths, the proposed changes could have come with a $10 billion annual price tag to ratepayers, all without improving grid reliability. And that increase would have been on top of already significant increases resulting from the 2021 near grid meltdown.

So was the outcome a case of democracy working as designed or political self-preservation?

Whichever was the overriding reason, the Senate bill that would have forced the state to finance a bunch of gas-fired generators was defeated. Instead, the focus shifted to a bill designed to direct state grid operator ERCOT to incent power suppliers to make available standby power in the case of an emergency. Believe it or not, the concept of reserve power is a foreign one in Texas. The bill passed with a caveat: any increase in costs could not exceed $1 billion annually.

On the renewable front, the most potentially damaging proposals were either deleted or diluted, including the imposition of new permitting restrictions. Here again, score one for consumers.

Last year IdeaSmiths found that clean energy had reduced wholesale electric prices in Texas by nearly $28 billion from 2010 to 2022, with most of those savings coming in the last three years. Jeopardizing those savings is likely what created the “odd couple” coalition of business and industry groups, environmentalists, and clean energy forces.

It wasn’t all good news though. Little to nothing was done to promote energy efficiency or demand response efforts.

Well, you can’t win them all. Given the influence of the fossil fuels industry, and the current political dynamic in Texas, the outcome was as good as could be reasonably expected. But don’t be surprised if the effort to curtail renewables continues.

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This thought leadership article was originally shared with Energy Central's Clean Power Community Group. The communities are a place where professionals in the power industry can share, learn and connect in a collaborative environment. Join the Clean Power Community today and learn from others who work in the industry.

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