Life: Powered, an initiative of the Texas Public Policy Foundation (TPPF), has submitted comments to the Public Utility Commission of Texas (PUC) concerning its proposed interconnection allowances rules. These new rules are a consequence of the enactment of House Bill 1500 by the 88th Legislature.
According to its website, Life: Powered is a TPPF project that aims to ensure all Americans have access to abundant, safe, reliable, and clean energy. The organization asserts that energy use is essential for human flourishing and that our freedoms of movement, choice of residence, and enjoyment of life are all dependent on energy.
During the 88th legislative session, House sponsors Reps. Justin Holland (R), Keith Bell (R), Terry Canales (D), Craig Goldman (R), and Travis Clardy (R) passed House Bill 1500. According to the Texas Legislature Online, this bill established new rules related to the continuation of the PUC and its functions.
In response to these changes, the PUC proposed a new interconnection allowance for generators. As stated by Vinson & Elkins, a global law firm in an article by Mike Tomsu and Steve Weinberger, HB1500 aimed to incentivize energy generators to construct their facilities as close as possible to existing interconnecting transmission lines in order not to burden ratepayers with higher interconnection costs.
Brent Bennett, policy director at Life: Powered, commented on the increased costs borne by ratepayers: "The transmission cost of service (TCOS) has more than doubled over the past decade, from $1.7 billion to $4.5 billion, placing an increasing burden on Texas ratepayers. Some of the increased TCOS can be attributed to rising interconnection costs for wind and solar generation added to the ERCOT grid in recent years, which HB 1500 correctly seeks to limit."
According to the U.S. Energy Information Administration, renewable energy sources such as wind and solar accounted for approximately 25% of the state's generation portfolio in 2022. Texas led the nation in wind power and ranked second in solar power.
Bennett expressed criticism of the proposed rule change, particularly its tiered structure: "The PUC's proposed rule creates two tiers, with a higher allowance for generators connecting at higher voltages. This tiered allowance will primarily favor wind and solar projects that are farther from load centers and subvert the purpose of HB 1500. A single allowance at a level between the two existing tiers will strike the right balance of reducing costs to ratepayers while not stunting the development of new dispatchable generation."
