After receiving their marching orders from Gov. Greg Abbott, energy regulators in the Lone Star State are poised to rework the makeup of the state’s power grid, including eschewing wind and solar power for natural gas.
The Texas Public Utility Commission (PUC) is being tasked with ensuring that a blackout like one that occurred earlier this year doesn’t happen again. As PUC and Electric Reliability Council of Texas (ERCOT) seek favorable solutions, Energywire reported that PUC Chairman Peter Lake noted that any changes could favor power plants that utilize fossil fuels such as natural gas, as well as nuclear energy, over renewable energy options.
“We are not tweaking on the edges or making marginal changes,” Lake was quoted as saying. “We are taking a blank-slate approach for a full overhaul and redesign of this market to drive reliability.”
According to Energywire, Lake explained that PUC could have an idea of how its update might look by the end of the year. The report noted that cost is a key concern for the chairman, who was appointed to the PUC post by Abbott earlier this year.
Lake also acknowledges that key players, including lawmakers and ERCOT, agree that change is needed.
“Texans deserve a more reliable grid, and we’re aggressively moving to make that a reality,” Lake said, according to Energywire.
In a letter to PUC earlier this year, the governor urged the commission to order Texas’ grid operator to set up a maintenance schedule that favors generators that rely on non-renewable energies. Josiah Neeley, the Texas director at R Street Institute, told World Oil that the governor, who is up for reelection in 2022, seems to be creating favorable conditions for fossil fuels going forward, without firmly addressing the key issues.
He also noted the state’s power-generating capacity was sufficient when the blackout occurred.
“The problem was that the capacity we had wasn’t usable because of the weather,” Neeley told the magazine. “This focus of trying to pit fuel types against each other has nothing to do with the February event and it is inconsistent with the basic market set-up, which is to deliver needed power at the lowest price.”
Putting all of the state’s chips on fossil fuels may be a practical choice, according to Texas Railroad Commissioner Wayne Christian, who told the Austin News that February’s disaster made it clear the state relied too heavily on wind and solar power. He told the publication that he held that opinion before the blackout occurred, fearing that a winter storm could cripple renewable energy production in the state.
And those renewable energies do not come cheap. Real Clear Energy reported that companies in the Lone Star State spent an estimated $66 billion on renewable energies before the blackouts, while noting that the wind and solar sectors received subsidies totaling $21.7 billion, citing a report by The Energy Alliance’s Bill Peacock, a veteran Texas analyst.
This could prove to be the biggest challenge for regulators and lawmakers in the state. With Texas lacking energy alternatives, the Real Clear Energy report concluded that consumers could face up to $38 billion in excess costs, a hard pill to swallow with an election year approaching.
