Energy Exchange

Maybe you read the reports from the renewable energy industry like I do, but just in case you missed it: China is officially staking its flag on the Texas wind market. Fortunately it can’t export the construction and installation of what will be one of the biggest wind power plants in Texas (and the U.S.), but China will be building all 240 wind turbines for this 36,000-acre project and shipping them here for installation.

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I 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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Today, 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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I went to a hearing last night at the Capitol and would like to commend members from both sides of the aisle – republicans and democrats – for their clear and strong interest in increasing Texas’ renewable energy profile. Sen. Fraser said at a conference earlier this year some really good things about Texas doing such a good job on climate and energy. One of his best suggestions I think was for Texas to continue what we’re doing, and to me that means continuing with our Renewable Portfolio Standard (RPS).

I learned a long time ago, “if it ain’t broke, don’t fix it.” The Texas RPS is that rare government program that has come in under budget, ahead of schedule, and far exceeded expectations. So it seems to me that when Texas wants to do something for renewables, where other states have tried and failed, we have a clear model for success that we should be a proud champion of throughout the nation.

The Public Utility Commission has shown that our RPS has saved Texas consumers money, and I believe that SB 541 is a good example of a policy that will continue that trend by allowing market forces to find us the best and cheapest renewable energy, while capping prices to make sure consumers don’t pay too much.  Some may argue that “Texas got lucky with wind,” but I strongly disagree, because when you use free-market principles to drive innovation and performance, Texas consumers will always benefit. 

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