Monthly Archives: May 2009

ERCOT Study: Why?

Colin MeehanI am perplexed. Texas news headlines are hyping the phrases “big electric bill” and “tax could raise bills,” misleading ratepayers everywhere and leaving out a big chunk of the whole story.

ERCOT released its “analysis” of the impacts of CO2 legislation on Texas this week and I’m not really sure what it’s an analysis of, except maybe some bizarre world in which the only option available for reducing carbon emissions in Texas in the next five years is switching entirely from coal-fired electricity to natural gas-fired electricity.

The whole story? In its much-publicized study, ERCOT failed to incorporate carbon offsets, energy efficiency or the impact of renewable energy beyond what is already planned, in the current bill before congress.

In fact, in the first paragraph of the paper, ERCOT acknowledges that it has not attempted to determine the equilibrium price of allowances, which is one of the fundamental benefits of using free-market economics to drive innovation and decision making in reducing greenhouse gasses. 

To put it simply, what ERCOT is saying is: “There are a host of inexpensive ways to reduce greenhouse gas emissions under the Waxman-Markey bill. We have not analyzed any of those.”  Given the statement Commissioner Smitherman, who requested the report, gave the Dallas Morning News, I can understand why ERCOT may have focused on such a narrow portion of the legislation. “I’m more concerned about climate change legislation than I am about climate change,” he said.

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The Sun Shines on Senate Bill

TX SenateToday, Senator Watson led the Senate in passing its most important renewable energy bill this session: SB541. The bill is an expansion of the incredibly successful Renewable Portfolio Standard (RPS) that has been the flagship policy for renewables in our state for the last 10 years. 

Ten years ago, Texas was ranked 4th in the nation for wind energy and only had 7 percent of the nations wind capacity.  Now, we are the nation’s leader with 28 percent of the wind market, and at a net benefit to Texas electric consumers. If Texas were a country (since some seem to want it that way) we would be ranked 6th in the world in wind power—behind the rest of the US, Germany, Spain, India and China. Now, with the Senate passage of this 1,500 MW renewable energy bill, industry insiders agree we are poised to have exactly the same success with solar power.

The truth is, almost everyone supports this bill and the few who don’t are referencing outdated information and misrepresented data to support their contention that renewable energy would cost Texans too much without acknowledging any of the proven benefits. The PUC has shown that large amounts of “free fuel” renewable energy, reduces electric market prices in Texas. Additionally, the Texas General Land Office estimates more than $209 million could go to the Permanent School Fund from renewable energy, more if this RPS is passed.  These benefits, along with the savings from reduced CO2, NOx and SO2 emissions, add up to a big bonus for Texas consumers. Did I mention the estimated 123,000 jobs this policy will help bring to Texas?

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