Texas lawmakers are weighing new bills that would shift the state’s power generation away from renewables and toward natural gas, threatening its status as a wind and solar energy powerhouse and potentially driving up costs for consumers.
The Texas Senate advanced two bills, S.B. 6 and S.B. 7, on Wednesday aimed at funneling more money to natural gas and other sources of energy generation deemed dispatchable, meaning that they can be brought online at need, in an effort to firm up the power grid and ameliorate reliability concerns.
S.B. 6 would use $10 billion in public funds to finance operations and repairs of existing fossil fuel plants in the state.
Meanwhile, S.B. 7 would restructure the power markets by creating a financial incentive for dispatchable sources of energy. Its supporters say it will help “level the playing field” by funneling money to power sources that could come online within two hours and run for at least four hours.
Both will now be considered by the Texas House, where lawmakers have nearly eight weeks to debate them.
Proponents of the bills say adding more gas-fired generation to the grid will help the state protect against outages caused by extreme weather events, such as 2021 Winter Storm Uri, which caused 4.5 million Texans to lose power and resulted in 246 deaths.
Texas Lt. Gov. Dan Patrick, who presides over the Senate, has led the charge for adding more gas-fired generation. “We have to level the playing field so that we attract investment in natural gas plants,” Patrick told reporters last fall, saying he could not imagine ending the session without a “guarantee” that more natural gas plants would be built. “We can’t leave here next spring unless we have a plan for more natural gas power,” he said.
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But critics say the bills, now being debated in the House, are moving the Texas power market in the wrong direction.
“I think that some people would posit the choice as ‘either or’ — either you’re going to get dispatchable generation, or you’re going to get non-dispatchable generation. I would argue that it is an ‘and,’ and we need both,” Michael Jewell, an attorney and advisory board member for the Conservative Texans for Energy Innovation, said in an interview.
“And just because the legislature wants to increase the amount of dispatchable generation on the grid, doesn’t mean that you have to stop the development of renewable generation or punish the renewable generation that is here or has been wanting to come online,” he said.
Jewell, who has worked in the Texas legislature in various capacities since 1985, said he sees a fundamental shift in the way lawmakers are regarding clean energy projects.
“The approach that we are saying now bears no resemblance to how Texas used to operate,” he said. “There has been a significant shift in the attitude towards renewables.”
Texas generated a whopping 180,145 gigawatt-hours of electricity from carbon-free sources last year, by far the highest in the country, according to Energy Information Administration data. California, by comparison, had just 124,055 gigawatt-hours of carbon-free generation, which includes nuclear and renewable sources.
But it’s also the leader in gas and coal power generation. And failure of natural gas production, storage, and distribution facilities was one of the major reasons the Texas grid operator, the Electric Reliability Council of Texas, or ERCOT, had issues during Uri.
The Federal Energy Regulatory Commission and North American Electric Reliability Corporation said in a November 2021 joint analysis of the disaster that 58% of the plants that failed or struggled during Uri were natural gas-fired.
Peter Lake, the chairman of the Public Utility Commission of Texas, which has led the push on some of the proposed market reforms, praised the effort as helping achieve “reliable and affordable energy for Texans.”
Last month, a coalition of industry, consumer, and environmental groups outlined their concerns about the pending legislation in a letter to the chairman of the state Senate’s Business and Commerce Committee.
The groups called for the state lawmakers to eliminate the grid “firming” obligations, or provisions that require renewable plants to add a backup source of power, from its proposals, to allow for nondiscriminatory, technology-neutral products and services to be added to the grid, and to consider all factors that can cause reliability concerns when sizing a product or service on the grid.
“We believe, if incorporated, these consumer-focused and market-driven principles will increase both the reliability and affordability of energy in ERCOT,” the Advanced Power Alliance, the Texas Solar Power Association, American Clean Power Association, Solar Energy Industries Association, and Conservative Texans for Energy Innovation said in the letter. “Texas has long been America’s energy leader and our ‘all of the above’ approach to investment has made us attractive to manufacturers and other industries dependent on affordable, clean energy.”
Whether it can continue to do so, however, is unclear. Now that the House has taken up the bills, Jewell said his hope is that there can be a debate.
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“Ultimately, will there be some bills that pass that are going to hurt the renewable industry? I fully expect that to happen,” he said. “The question is going to be, how bad is that damage going to be?”
