The Energy Alliance highlighted its newly published research, which criticizes the actions taken by the Public Utility Commission of Texas (PUC) intended to improve the reliability of the grid. Authored by Policy Director Bill Peacock, the research says that the PUC's plan will actually increase costs and reduce reliability by continuing heavy investment and subsidization of wind and solar generation and avoiding the creation of an "energy-only" market environment.
"The PUC’s effort does almost nothing to address the primary cause of unreliability in the Texas market, renewable energy. Instead, renewables will continue to dominate the market, making up almost 99% of all new generation coming online in the next four years,” Peacock said in a press release.
Following the severe winter storm Uri in 2021, Texas Gov. Greg Abbott directed the PUC to "take immediate action" in order to improve grid reliability across the state of Texas, according to a press release from the governor's office. This action was coupled with legislation passed by the Texas Legislature. Abbott's directive specifically instructed the PUC to incentivize reliable sources of generation and make unreliable generators pay for their shortcomings.
In a press release, the Energy Alliance lays blame for grid unreliability at the feet of renewable generators, such as wind and solar, due to their intermittent nature. The release points out that renewable sources are currently "dominating" the Texas energy market, and will continue to due so as they are projected to make up nearly "99% of all new generation coming online in the next four years."
The Austin Journal reported that the Texas Senate Committee on Business and Commerce believes the PUC's plan did not meet the directives of the legislature. In a letter signed by all of the committee members, the Committee stated that the PUC did "not include any evaluation of the dispatchable ancillary or reliability service directed by SB 3." Sens. Donna Campbell and Lois Kolkhorst both made public comments indicating their disapproval of the PUC plan and reiterating their concerns over the unreliable and costly nature of the current grid conditions.
Earlier this month, Abbott issued a statement in a letter indicating his support for the new PUC plan, according to Lone Star Standard.
“After an extensive 18-month stakeholder engagement process and a review of the market designs analyzed in the reliability study commissioned by the PUC last year, the Performance Credit Mechanism (PCM) must be given strong consideration,” the letter reads. “As the Legislature has noted, a reliability standard must be the foundation of any reliability design. The PCM best meets this call because it is based on a reliability standard, incentivizes new dispatchable generation and maintains Texas’ energy-only market. The fact that generators have already publicly committed to build thousands of new megawatts of dispatchable generation resources if the PCM is adopted and implemented by the PUC further supports this point.”
The Energy Alliance's research found that the PUC's plan falls short of its directives and will increase costs and reduce reliability over time. The report specifically highlights the continuation of major tax subsidies for wind and solar generators and the lack of responsibility they face when they cannot generate the required amount of energy. According to the report, this could cost Texans nearly $8 billion a year by 2026. The Energy Alliance calls for the PUC to eliminate all tax subsidies at the state and federal levels, as well as requiring renewable generators to pay for costs they impose on the grid via a lack of generation.
