As the 88th Regular Legislative Session wraps up, the Lone Star Standard reached out to energy policy experts for their perspective on what the future looks like for the Texas grid and energy reliability in general.
On March 9, Texas Lt. Gov. Dan Patrick, and Sen. Charles Schwertner released a joint statement announcing their support for Senate Bills 6 and 7 and labeled them as priority legislation. The bills were aimed at ensuring a reliable energy grid across Texas and attracting new sources of reliable thermal electricity generation.
Senate Bill 7 ultimately died in Conference Committee and never passed. Senate Bill 6 met a similar end in a House Committee, where it never received a vote.
Senate Bill 2627, a replacement bill for SB 6, was passed out of the Texas House, according to the Austin Journal. Signed by Gov. Greg Abbott on June 9, SB 2627 now must wait for the passage of a Constitutional Amendment before becoming law.
House Bill 5 was another piece of priority legislation dealing with the grid, the Lone Star Standard reported. The bill serves as a replacement for the defunct Chapter 313 tax abatement program, which allowed school districts to offer tax incentives for business development. House Bill 5, unlike the previous Chapter 313, explicitly excluded renewable energy projects from receiving tax incentives. This exclusion was a priority for Abbott, according to the Lone Star Standard, and the governor signed the bill into law on June 9.
Brent Bennett, policy director of the Texas Public Policy Foundation, called the session a "mixed bag" on the grid and on energy in general. According to Bennet, SB 2627 creates a $5 billion loan and completion bonus program for the development of dispatchable power plants which will "start a massive lobbying parade to get at that state money."
"This bill was bad enough coming out of the Senate but became a Frankenstein when the House added a section that allows companies with a “public safety” purpose (think grocery stores and all sorts of similar companies) to access a portion of the money, up to $1.8 billion, to build backup generators. It's bad," Bennet said.
To make SB 2627 possible, Senate Joint Resolution 93 proposes a constitutional amendment to create the State Energy Fund Amendment and authorizes other funding mechanisms for the construction, maintenance, modernization, and operation of electric generating facilities. It was filed with the secretary of state on May 30 and will be on the general election ballot statewide on Nov. 7.
Bennet explained that unless SJR 93 is voted down, it will enshrine in the Texas Constitution that the state can finance new power plants and Texas taxpayers are going to pay a portion of the cost of every new power plant development.
“SB 2627 is supposed to wrap up by 2029, but with this provision in the Constitution, no sane company is going to risk 100% of their capital when some of their competitors get the state to pay for a portion of their power plant,” Bennett said. “The program will have to continue in perpetuity. It’s just like the wind and solar subsidies. Once instituted, they never die. At this point, I don’t see how we will build another dispatchable power plant in this state without taxpayer money. We did not need this bill, and now we will be stuck with the consequences of it."
Bennet also said HB 5 will create a better program than Chapter 313, but it still has very weak eligibility standards which will continue to make it a target for abuse.
Bill Peacock, policy director of The Energy Alliance, did not have many positive takeaways from the session either.
"If you like government intervention, the session was great,” he said. “If you like free markets, it was not so good. The Texas Legislature appropriated more than $8 billion in subsidies for generators while doing nothing to tackle the problem of renewable energy subsidies. The main takeaway for the legislative session is that Texas is no longer committed to letting markets solve our energy challenges. Moving forward, the direction of the market will be in the hands of central planners."
Peacock highlighted SB 1752 by Sen. Bob Hall as the best bill this session aimed at benefiting the grid and Texas consumers.
"It took direct aim at the harm being caused in Texas by renewable energy subsidies," Peacock said. "But the bill never even received a committee hearing."
Peacock also said the best way for legislators to restore reliable and affordable power in Texas is to "eliminate all energy subsidies, reduce renewable generation, and let the market work."
