Energy Exchange

Latest Brattle Group Report Points To Solar Power To Lessen Energy Crunch In Texas

By / Published: June 21, 2012

Is there a way for Texas to keep the lights on in the face of our energy crunch and manage to save electric customers some money at the same time?  According to a new report from Brattle Group, solar power needs to be a big part of the answer if the Public Utilities Commission (PUC) plans to reduce the financial impact of their decisions on consumers.  Fresh on the heels of their report detailing changes that could be made by ERCOT to keep our electric grid reliable, comes a new report from The Brattle Group showing the important role solar power can play in solving our long-term energy problems.

The difference between the reports is really focused on whether short-term fixes to help build new fossil-fueled power plants are enough, or if Texas should be looking at long-term solutions for the whole market (not just power companies, but customers too).  The report couldn’t be more timely either: over the past few years, Texas has relied on the few forward thinking municipal utilities like San Antonio’s CPS, El Paso Electric and Austin Energy to attract solar companies to the state.  Until now, the approach has worked. Because of those three cities, as recently as last year, the Solar Foundation ranked Texas #7 for solar jobs in the country and #9 for solar installations but as solar markets continue to grow throughout the U.S., Texas may be left behind. 

The market is changing quickly.  With panel prices declining 47 percent over the last year, many other states have entered the solar market – which means Texas can no longer rely on a few utilities to keep the state on the solar industry’s radar.  In fact, according to the latest report from GTM Research, Texas has fallen from a ranking of #9 in the nation for new solar installations to #15.

As the Brattle Group’s new report shows, the importance of this shift relates not only to growing jobs in Texas, but also to the state’s ability to provide homeowners and businesses with reliable electricity. As we come off of the warmest spring on record in Texas, with triple digit temperatures making us all thankful for our air conditioners, reliable electricity will remain a critical issue. The new rules proposed by the PUC will help companies build new power plants, but these rules cannot focus solely on power companies.  As the Brattle Report shows, we can meet the energy crunch head-on with policies that help Texans invest in solar to meet our growing energy demand in a way that relies less on water to operate.

Also posted in Renewable Energy / Read 1 Response

Let’s Improve Texas’ Energy Efficiency Programs Instead Of Adding More Red Tape

By / Published: June 14, 2012

Summer is upon us: in Austin on Monday the mercury hit 101 degrees, with the humidity it felt like 110; this can be compared to a historical average high of 92 degrees this time of year.  This weather report won’t surprise anyone that follows global warming trends: according to a report earlier this week, Texas is one of the 10 fastest warming states in the U.S. Since 1970, average temperatures have risen 2.3 degrees in the Lone Star state.  Rising temperatures mean rising demand and more stress on our already strained electric grid, so you would think the state would be focused on near term solutions for rising energy demand, specifically energy efficiency and conservation.

(Credit: www.poonamsagar.com)

The timing couldn’t be better either: last year, the state of Texas passed legislation to increase and strengthen energy efficiency programs and the Public Utility Commission (PUC) is currently developing a new rule around that legislation.  While this appears to be good news, some parts of the PUC’s proposed rule actually would hurt energy efficiency programs and decrease the effectiveness of current programs by adding unnecessary red tape and discouraging efficiency.  At the same time, the PUC has contracted with outside consultants to ask citizens to turn up their thermostats during the hottest days of the summer.  Such public appeals are commendable, but it doesn’t make sense to add red tape to proven programs that allow customers to reduce energy use without turning up their thermostats, while at the same time spending money on unproven programs that are difficult to verify.

At a PUC workshop last week, stakeholders voiced many of the concerns around proposed changes that would weaken energy efficiency programs.  Most stakeholders seemed to agree that the PUC proposal creates new problems without resolving existing ones, like better monitoring of existing programs to ensure they are working.  With temperatures rising and our electric grid already strained, we can’t afford those kinds of fixes. Given the broad stakeholder agreement, we hope the PUC will remember “if it ain’t broke, don’t fix it.”

Also posted in Energy Efficiency / Comments are closed

New ERCOT Report On The Texas Energy Crunch: PUC Tweaks Are A Move In The Right Direction, But Not Enough To Keep The Lights On

By / Published: June 5, 2012

Last week The Brattle Group released their Electric Reliability Council of Texas (ERCOT)-commissioned report on what Texas can do to make sure we keep the lights on this summer, the next and for many future summers after.  As Jim Marston discussed in the Houston Chronicle last Friday, the Brattle Group is no stranger to resource issues in Texas: in 2009 they reported on demand response opportunities in Texas and other states in a report commission by the Federal Energy Regulatory Commission. 

Using that work and more recent analyses, the report shows the role that demand response can play in meeting Texas’ future energy needs.  Demand response is any change a customer makes in normal electric usage patterns in response to market signals; Brattle recommends developing programs that pay customers a market-based price for their actions, rather than simply asking them to reduce energy during peak hours. 

So what makes such a nerdy idea so important?  The Public Utility Commission (PUC) is considering raising offer caps in the wholesale market to better reflect the true cost of peak energy usage in an effort to create a more efficient market.  According to Brattle, this move will help, and may even be needed, but “reliance on scarcity prices is unlikely to achieve ERCOT’s current reliability objectives,” largely due to extreme weather events which are expected to become more frequent as a result of global warming.

Raising the offer caps isn’t just a purely abstract concept; it means real rate increases for Texans.  At the same time, Brattle found that Texas could meet 15% of our peak energy needs through demand response alone, but only if ERCOT gets serious about allowing residents and small businesses to participate in demand response programs that have historically been aimed at big industrial customers.  Demand response programs mean more money in ratepayers pockets, all while helping to stabilize the grid. 

Improvements in small programs with a limited scope like the “ERS” program are certainly helpful, but as Brattle points out repeatedly, those improvements won’t be enough to keep the lights on in the next few years.  Hopefully the PUC will direct as much effort into programs like demand response, which puts money back in customer’s pockets, as they have on increasing wholesale offer caps. 

Demand response is a big piece of the picture but it’s not the whole painting: energy efficiency programs and an expansion of peaking renewable resources like solar and coastal wind power will also play a large role, particularly as we consider a hotter, drier future in Texas with less water to cool power plants.   The Brattle report lays out some excellent recommendations, demand response among them, and – as the summer continues – we’ll be looking into Brattle’s work as well as other initiatives that Texas can take to find its way out of this energy crunch.

Also posted in Demand Response, Energy Efficiency, Renewable Energy, Utility Business Models / Read 1 Response

ANGA’s New Texas Report Serves Up A Heaping Helping Of ‘Number Salad’

By / Published: April 26, 2012

The American Natural Gas Association (ANGA) released a paper in March titled “Texas Natural Gas: Fuel for Growth,” to a lot of press, and rightly so.  The paper correctly cites several benefits of using and producing natural gas in Texas: it is produced in-state, has water use and air-quality benefits when compared to coal and helps to fund state and local governments through taxes. 

Unfortunately, the paper also makes some claims that are difficult to take seriously; perhaps the first warning sign should be that while the paper was presented as an economic analysis, the authors have no economic credentials.  Dr. Michael J. Economides, a chemical and biomolecular professor at the University of Houston, and petroleum engineering consultant Philip E. Lewis spend little time worrying about the details in this report, serving up a heaping helping of “number salad.”

For instance, the $7.7 billion “loss” is calculated by projecting the potential use of gas in Texas, if it had followed the national trend, against the actual use.  But in looking at the data, it’s not clear that the Texas fuel mix ever tracked the national fuel mix.  Even more importantly, looking at the authors’ own slides, Texas uses 20% more natural gas in its fuel mix than the nation.  If anything, the national fuel mix is following the trend set long ago by Texas —adding more natural gas and wind, while decreasing coal output.

What might shock the authors is that natural gas consumption in the electric power sector has increased by around 5,000 one thousand cubic feet of gas (MCF) since 2006, 800 MCF in transportation and nearly 10,000 MCF in the industrial sector. 

There are so many misleading statistics and inaccuracies that we could practically write a report on the report, but instead I’ll just focus on one aspect that stands out in particular. 

When it comes to comparing natural gas to coal power, the authors are quick to cite the many local benefits of using natural gas energy produced in Texas: it’s cleaner than coal and creates local jobs and a local tax base.  Wind energy has largely produced the same benefits: local wind power has brought jobs and a growing tax base and population to rural Texas counties that “had seen consistent, significant population losses since 1950.”  On top of the economic development benefits, where natural gas beats coal in reducing pollution, wind energy beats both by reducing pollution basically to zero.  But when it comes to discussing any of these benefits from wind energy in the report, the silence is deafening. 

Natural gas is reshaping our energy landscape.  And, done right—with the proper, mandatory environmental safeguards in place and reduced methane leakage rates—compared to coal plants, natural gas power plants offer other distinct air quality benefits.  It emits less greenhouse gases than coal when combusted and avoids mercury and other dangerous air pollutants that come from coal.

However, the same – and more – can be said about wind energy and Texas’ potential clean energy resources, including solar and geothermal power, among others.  Rather than pitting our local clean energy resources against each other as this report does, we should seek to expand and diversify our clean energy mix, reaping health, environmental, economic and security benefits.

Also posted in Natural Gas, Renewable Energy / Read 1 Response

Austin Energy’s Electric Rates Are Lower Than The Texas Public Policy Foundation Would Have You Believe

By / Published: February 22, 2012

Austin Energy’s Residential Rates: 12% Below the Average Rate in ERCOT’s Competitive Markets – After Accounting for the Proposed 14.4% Rate Increase

Austin Energy has been in the news a lot lately, and most often for some controversy around the ongoing rate review process.  What often gets lost in these heated discussions is that fact that Austin’s heritage of clean energy and innovative approaches to economic development are firmly rooted in our city’s electric utility, and that the utility allows city leaders to keep taxes low.  At the same time, Austin Energy’s leadership often puts it in the crosshairs of groups that are ideologically opposed to clean energy and city owned utilities, and whether supported by facts or not, the opportunity to criticize Austin Energy has proven too difficult to resist.

(Source: www.inhabitat.com)

The Texas Public Policy Foundation (TPPF) is often one of the ringleaders in the crusade against clean energy as well as city owned utilities, and they’re not going to let facts get in the way of scoring an ideological point.  In knocking Austin Energy and promoting their agenda, TPPF cherry picks data and uses coded language like the idea that customers “can choose” rates lower than Austin Energy’s if they are in the competitive regions of the Electric Reliability Council of Texas (ERCOT).  The truth is, for a customer in the competitive areas of ERCOT to maintain lower rates than Austin Energy they would have to change electric providers each month, and they’d have to be pretty lucky on top of it.

The problem is that the rates TPPF reference when they say customers can choose lower rates are usually introductory, variable or otherwise subject to increases not included in the rates that customers do choose.  What this means is that customers actually pay more than TPPF’s selective math would suggest, but TPPF seems more concerned with scoring political points than what customers actually pay for their electricity.

Look at the data from a more logical point of view and you will see that competitive regions in ERCOT average higher residential rates than ERCOT’s average rates.  In fact, ERCOT rates are kept low largely by municipal and co-operative utilities like Austin Energy, the customer owned utility model that TPPF criticizes in their latest missive.  The most recent data available for a real analysis of the rates Texans pay was released by the Energy Information Administration just a few months ago, including data through 2010.  As the chart below shows, Austin Energy’s rates are well below the ERCOT average, and even farther below the average competitive market rate, despite TPPF’s claims to the contrary.  

Source: Energy Information Adminstration (EIA)

Even if you account for Austin’s proposed 14.4% residential rate increase through 2015, the the new rates are 12% below current competitive rates in ERCOT. This calculation doesn’t even take into account the fact that nominal retail energy prices in ERCOT are projected to go up by 11% by 2015 according to the Energy Information Administration.  Taking this projected rate increase into account  it’s clear that Austin Energy’s rates – even after the rate review is completed – will be below the competitive average.

As we talk about rates in our community and across Texas, it’s important to remain focused on factual analysis and avoid misleading assumptions driven more by ideology than a desire for real debate. Unfortunately, arguments like those put forward by TPPF don’t contribute to an honest discourse; they mislead the public, distort reality, and threaten Austinite’s low tax lifestyle.

Also posted in Utility Business Models / Read 6 Responses

A Texas Coalition for Water, Energy and Economic Security Briefing: The Drought Threatens Texas’ Power

By Kate Zerrenner / Published: February 13, 2012

(Source: www.businessinsider.com)

This commentary was originally posted on the Texas Clean Air Matters Blog.

On Thursday, February 2, the Texas Coalition for Water, Energy and Economic Security (TCWEES), which includes Environmental Defense Fund and other stakeholders in the environmental and business community, held a legislative briefing discussing the impact that the drought could have on power in Texas. This is the first of a series of TCWEES-hosted, educational events focused on energy efficiency that will be held around the state during the legislative interim.

The speakers at the briefing included:

  • Dr. John Nielson-Gammon, Texas State Climatologist and Regents Professor of Atmospheric Science at Texas A&M University
  • Dr. Carey King, Research Associate at the Center for International Energy and Environmental Policy at the Bureau of Economic Geology at University of Texas at Austin
  • Mark Armentrout, President and CEO of Texas Technology Partners; former chair of ERCOT
  • Cris Eugster, EVP and Chief Sustainability Officer for CPS Energy (San Antonio)
  • Kevin Tuerff, Principal and President of EnviroMedia

In 2011, Texas experienced record heat and drought and the electric grid was stressed as a result. Though the Electric Reliability Council of Texas (ERCOT) took a proactive approach to dealing with the crisis, the potential still remains for economic loss caused by electric generation outages related to heat and drought. The drought is predicted to continue and action is needed to protect Texas’ power and economic viability. Given that it can provide the same amount of service while using less electricity, energy efficiency should be a significant part of the solution. Energy efficiency reduces waste, electric bills, emissions and water use needed for electric generation.

During the briefing, Dr. John Nielson-Gammon brought up the recent rain in Texas. He said that while the rain is great for taking people’s mind off the drought, it is not useful for setting us up for the summer of 2012 because it’s too little too late for our current situation. He added that climate change is an important enough factor in the drought that it must be considered in long-term water planning.

(Source: www.droughtmonitor.unl.edu)

Texas State Representative Donna Howard was in attendance and she posed a question about better coordination between state agencies. Though there is some coordination, there is no actual coordinated plan among and between state agencies to be thoughtful about planning for Texas’ future water and energy needs. Dr. Carey King pointed out that both the Texas Water and Development Board and the Texas Commission on Environmental Quality work on water issues, but it isn’t clear how power plants fit into water priorities. He stated that we don’t have an answer and that we need a better understanding of the breadth and depth of water issues.

The key takeaways from this briefing are that water and power are inextricably linked and the stress that the drought has had, and will continue to have, on our ecosystems and electric systems is a serious concern. This is not something that will go away as the climate will continue to change. Cleaner energy sources and greater energy efficiency will cut carbon pollution and help stabilize the climate, protecting our land, water, air and health. We need to find solutions now.

Also posted in Climate, Energy-Water Nexus / Comments are closed