Energy Exchange

Texas Legislature Update: Chapter 313 And Texas Wind Production

By Marita Mirzatuny / Published: May 16, 2013

Source: Texas A&M AgriLife Research and Extension Center

This week, the Texas Senate will likely debate House Bill (HB) 3390, introduced by Representative Harvey Hilderbran and sponsored by Senator Bob Deuell. This bill, which passed in the House and out of the Economic Development Senate Committee on May 14^th, reauthorizes Chapter 313 of the Texas Tax Code – commonly known as the Texas Economic Development Act. Chapter 313 is an economic development program that allows companies to apply for a temporary reduction in property taxes in exchange for a major capital investment commitment.

Chapter 313 has helped put Texans to work and grow rural economies. Wind energy is among the industries that take advantage of this program and, in the process, has attracted around $24 billion in wind energy investments to 56 counties throughout the lone star state – $15 billion of which was a direct result of Chapter 313. Wind energy projects create new jobs and employ meteorologists, surveyors, structural engineers, assembly workers, electrical workers, construction workers, lawyers, bankers, technicians and local service jobs associated with increased growth.

However, Chapter 313 is set to expire in 2014. If the Texas Senate does not renew this crucial bill as is (with renewable energy projects included), then the state stands to lose its competitive advantage in attracting wind and solar development to the state – potentially losing projects to the 34 other states offering clean energy incentives. Some states don’t impose a property tax on wind projects at all.

Furthermore, including renewables in Chapter 313 helps growing school districts’ tax bases, which benefit from the substantial investment that wind energy projects bring to their communities. The expected 30+ year life span of these projects makes them lucrative municipal assets. Additionally, landowners in rural Texas receive lease payments for each turbine installed on their property. These infusions of capital help farmers and ranchers support their land, particularly during times of extreme drought. 95 percent of land used for wind turbines can still be used for agricultural purposes, allowing farmers and ranchers to benefit from a second harvest – of wind.

Also posted in Renewable Energy / Read 5 Responses

Don’t Be Fooled By Recent Lows: The Texas Energy Crunch Is Still A Big Issue

By / Published: May 10, 2013

This past month, we experienced refreshing, cool and somewhat wet weather in Texas. However, those working on energy issues know all too well that this weather change doesn’t mean we have escaped the worst of the “energy crunch.” As the farmers say: “If you don’t like the weather in Texas, wait ten minutes and it will change.” Despite cooler temperatures, an unplanned power plant outage during a warm day late last month forced the Electric Reliability Council of Texas (ERCOT) to issue an advisory, demonstrating just how quickly things can change.

At the same time, recent ERCOT reports indicate that reserves will be tight this summer due to an anticipated record level of high energy demand and stunted growth in new electricity resources – thus making conservation notices likely and rolling outages probable. All of this points to the important role conservation programs, like demand response, can play for ERCOT. Some ERCOT staff and stakeholders have recognized the importance of demand response, which allow customers to voluntarily reduce electricity use in response to a signal from utilities. Others have called explicitly for programs that pay customers for reducing energy the same way generators are paid for producing energy, an approach EDF has advocated for several years.

ERCOT and a few retail electric providers already have conservation programs, albeit limited, in pilot phases that compensate customers for their participation. But in comparison to other regions, Texas lags far behind other states – despite having the highest potential for conservation and clean energy resources in the U.S. That’s why the three remaining weeks of the legislative session are so important: two critical pieces of legislation that would open up demand response in Texas to meet our electricity reliability goals and drive further market competition are under review.

Senate Bill (SB) 1351 from Senate Business & Commerce Chairman John Carona would require ERCOT to allow customers to participate in all competitive energy markets; the bill passed the Senate earlier this week and is now on its way to the House of Representatives. SB 1351 is an excellent piece of legislation to propel demand response in Texas, but alone it is not enough to ensure Texas can keep the lights on during the hottest summer days. A separate bill from Senator Kirk Watson, Senate Bill (SB) 1280, would accomplish just that by requiring ERCOT to secure enough demand response to meet its reliability needs if existing resources fall short; the bill passed unanimously out of the Senate Business & Commerce committee.

These bills will make all the difference this summer and for many summers to come. The Texas Legislature has the opportunity to ensure that ERCOT and the Public Utility Commission (PUC) have all the necessary tools to avoid rolling blackouts over the next several years as we wait for new energy resources to come online. Read More »

Also posted in Demand Response / Read 2 Responses

Why The Texas Railroad Commission Must Get Well Integrity Right

By Scott Anderson / Published: April 25, 2013

On February 28, 2013, something went very wrong on a well site in Hemphill County, Texas:

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According to Railroad Commission investigators, there was “one injury from well head being blown off when casing parted.”

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According to the investigators, it took almost two weeks before this “frac water” stopped flowing out of the wellbore, and another week for the well to be plugged. The investigation did not determine the underlying cause of this accident.

Getting the rules right on well integrity is about preventing pollution, protecting the environment, securing property and, most importantly, saving lives. There were no fatalities in this accident, but sadly, that is n ot always the case (learn more about risks EDF’s natural gas work addresses).

The Railroad Commission is close to finalizing a historic well integrity rulemaking, the most significant overhaul of these practices in several decades. It is, on the whole, an excellent effort, bringing Texas back to the forefront on well construction, operation and maintenance practices. The proposals are progressive and will lead to real environmental benefit.

One particular provision of the proposal, however, falls short of the standard set by the rest of the rulemaking. It has to do with the amount of space surrounding casings, the steel pipes that go underground. This “annular space” (or “annular gap”) is supposed to be filled with cement as necessary to isolate groundwater from pollution, protect the casing from corrosion, and prevent gas from migrating to places it does not belong.

The width of the annular gap matters. In order for a cement job to be effective, the gap must be neither too wide nor too narrow.

Also posted in Natural Gas / Comments are closed

Renewables BuyBack Bill Pays Good Money For Clean Energy

By / Published: April 15, 2013

Picture this: You live in Texas, the state with the most solar energy potential in the U.S. Knowing this, you decide to install solar panels on your home’s rooftop because, in Texas, you can lease – rather than buy – the entire solar energy system. The option to lease allows you to take advantage of a low monthly payment that will be offset by the savings on your energy bill, rather than face high upfront investment costs.

Now, while you are at work during the day, your panels are actually putting excess, unused energy back onto the grid, when electricity is most expensive. And, that surplus of energy isn’t just wasted; it is used by your electric company to serve other customers. In most states, electric companies buy this power back at a retail rate. But, in Texas it’s not quite that simple. In order to see any form of pay back, you have to be a lucky customer of one of only three retailers – TXU Energy, Reliant Energy and Green Mountain Energy – that offer “renewable buyback” rates in Texas. If you happen to buy electricity from one of the other 50 retailers serving residential providers across the state, though, you could always switch over to a renewable buyback program. But there is no guarantee that you will be paid a fair market value for the 25+ years your solar energy system is expected to last.

Making a long-term investment to protect against highly-fluctuating, unpredictable electric rates is a difficult decision, and making that decision without knowing whether you are guaranteed fair compensation is nearly impossible. This is one of the key reasons why Texas lags behind the nation in solar adoption. Fortunately, there is a solution in the works. Senate Bill 1239 from state Senator Jose Rodriguez seeks to guarantee homeowners, schools and religious facilities at least a minimum buyback rate based on wholesale market energy prices, which were about 50 percent lower than retail rates in 2011, on average. The bill has a similar impact for rural electric co-operative, municipal and independently-owned utility customers, ensuring that any homeowner, school or religious entity that installs a properly-sized solar energy system will be compensated comparable to the way a fossil fuel power plant is compensated in the wholesale market. Read More »

Also posted in Renewable Energy / Tagged Texas Legislature | Read 1 Response

Lowering The Price Of Residential Solar Starts In The Neighborhood

By EDF Blogs / Published: April 11, 2013

By: Guest Blogger Scott A Robinson, University of Texas at Austin – Energy Systems Transformation Group

Source: SolarCity

The price of solar panels has been decreasing rapidly in recent years. This decrease in price has been reflected in residential markets, with installation numbers booming. However, the total costs of the system remain high enough to discourage mainstream adoption of the technology—even in places like Texas, which have abundant solar resources.

From a customer’s viewpoint, there are two components of the cost of a solar photovoltaics (PV) system. The first is the “sticker price” of the system: the price you pay out of pocket. The second is information cost: the time you must spend researching the technology to understand if it would be a good investment overall. This is a more difficult task for PV technology than it is for a new phone, or even a new car. The complexity of assessing solar PV creates a cost barrier on top of the reported price of the system.

To better understand these costs to consumers, and what can be done to decrease them, Dr. Varun Rai and I looked at data from PV owners across the state of Texas. We wanted to better understand the drivers behind the length of time people spent researching solar PV before deciding to buy. Our paper describing the results of the research, “Effective Information Channels for Reducing Costs of Environmentally-friendly Technologies: Evidence from Residential PV Markets”, was published last month in Environmental Research Letters (ERL). Read More »

Also posted in Investor Confidence Project, Renewable Energy / Read 1 Response

In Texas, Freshwater Use For Oil And Gas Should Be Reduced Strategically

By Virginia Palacios / Published: April 9, 2013

Texas is suffering from a water deficit; one that is spurring lawmakers at the Texas Capitol to discuss unprecedented, and much needed, investments in our water infrastructure. With roughly 98 percent of the state in drought and water use restrictions in place in 70 percent of Texas counties as of April 3, 2013, it is crucial that our legislators consider every tool available to protect Texas’ water supply. One approach is reducing freshwater use in the oil and natural gas sector, which can help alleviate competition for scarce water resources; however, this should be deployed at strategic places and times to minimize pollution risks and ensure a sustained future water supply for Texas.

In the Texas Legislature, the House recently passed a bill which will provide $2 billion to fund water supply projects. It might surprise you to hear that this high price tag represents less than 10 percent of the state funding that will be needed over the next 50 years to sustain water supplies for Texas’ growing population. In light of this, it is essential that legislators enact bills that encourage responsible water management solutions. Although the oil and gas industry’s water use appears miniscule when considered on a statewide basis, even small amounts can have a big impact in the most water stricken areas. EDF created a map of the counties in Texas currently being impacted by water scarcity and that would benefit greatly if the oil and gas sector reduced its use of freshwater.

Data used to create the map revealed the following:

The majority of water used for Texas oil and gas development in 2011 was in 13 counties, ten of which currently have water restrictions in place.
For 12 counties, oil and gas water use made up at least 25 percent of overall county-wide demand in 2011.
In 15 counties, oil and gas water use is projected to be greater than or equal to 25 percent of the water deficit in those counties in 2020.
In five counties, 100 percent of the water deficit projected for 2020 can be met by cutting oil and gas water use by half.

The oil and gas industry is a prime candidate for reducing its reliance on freshwater because – unlike the agriculture and municipal sectors – using non-freshwater is technologically feasible. Some of the most popular alternative water sources for the oil and gas industry include brackish (or salty) water, treated flowback water from hydraulic fracturing and reclaimed water from public wastewater treatment plants. Taking advantage of these options could be a win-win-win for industry, people and the environment. Read More »

Also posted in Natural Gas / Comments are closed