Energy Exchange

Running on Energy

Source: Texas Tribune

One of the fundamental propositions of Rick Perry’s presidential run is that energy policy in Texas has been successful in de-carbonizing our grid.  The claim is a pretty big stretch, considering that we still generate more carbon dioxide than any other state and, as far as it relates to our successful renewable energy mandates, he may have something to brag about.  Perry has been eager to take credit for their success in boosting wind energy, although he’s not always the first to point to the mandates that lead to such unprecedented wind growth.  It’s been easy for Perry to support wind power, after all, success has a thousand fathers, and the most meaningful legislation was assembled without much involvement from him or his office.

Perry’s support for solar, however, has always been a trickier issue even though it’s incredibly popular with voters across the political spectrum.  Even though voters want to see Texas go solar, it’s anathema to some of his biggest fundraisers and allies such as homebuilder Bob Perry, who worked to weaken homeowner’s rights to install solar on their own roofs, and the Koch brothers, who have opposed clean energy in other states.  So far, Perry has managed to walk a tightrope with his typical political savvy – pointing to legislation he signed or supported while working behind the scenes to undercut the movement towards a real solar industry in Texas. 

Walking the Political Tightrope

Perry signed legislation in 2005 establishing a 500 MW non-wind renewable energy mandate and in 2007 strengthening that same mandate. His appointees at the public utilities commission (PUC) and Perry himself have been slow on doing anything meaningful with the legislation, leading to uncertainty for businesses wishing to grow in Texas.  Most people in the industry saw this legislation as a way to push solar development in largely the same way the original mandate pushed in wind development.  Now, in an article in the Texas Tribune, it sounds like Perry’s spokesman, Mark Miner, wants to pretend his boss never signed those laws.  In fact, it sounds like he doesn’t think Texas has any real potential as a state for solar development [emphasis mine]:

“If you mandate a specific technology, you run the risk of getting stuck with high costs, and such mandates have failed to pass the Legislature in the past. The state making a decision based on its own conditions is different than forcing a one-size-fits-all approach on the whole nation. For example, South Dakota, Texas, and other states in the Plains have great potential for wind because of the climate and geography; other states have good potential for solar, but that is not the same for every state.”

As Miner notes, the original mandate for wind that Perry signed into law was less than ten percent of peak demand, making it so small as to have no significant impact to consumers and, therefore, a reasonable goal for the state of Texas.  By comparison, the 500 MW goal Perry did sign into law – though his appointees at the PUC failed to act on it – would be less than one percent of total peak demand, having an even smaller impact than the original wind mandate.  It is now quite apparent with his recent appointment of Commissioner and outspoken renewable energy opponent, Donna Nelson, as Chair of the PUC that Perry wants to ensure that Texas never reaches the goal he signed into law though.. This results in the likely killing of any renewable energy progress at the PUC, including future legislation, should it pass.

Maybe the Sun Doesn’t Shine on Texas

It’s as if Perry and spokesman Miner think Texas doesn’t have any real solar potential, which makes me wonder if they’ve read their own reports on renewable energy, showing solar power could supply Texas’ energy needs many times over.  His claim that Texas chooses not to provide incentives based on technology is laughable in the face of Texas’ $1.2 billion/year “high cost” natural gas tax exemption. 

Maybe Perry needs to make a trip to San Antonio where they recently increased their solar goal to 400 MW after seeing how cheap solar proposals are today.  This is in addition to about 44 MW they’ve already installed or contracted, in other words almost the entirety of the 500 MW non-wind mandate that Perry signed into law but refuses support.  Some of Perry’s funders and allies argue that solar is too expensive, but the largest municipal utility in the state (and country) with some of the lowest electric rates in the state, just decided to invest in solar in a big way for two reasons that fit right in with Perry’s ideal energy policy: San Antonio wants to keep electric rates low and solar will help them do that; it also wants to grow jobs, a key outcome to their clean energy strategy.  Perry has been touting himself as the “jobs governor” since he started running as a nominee for President, so you’d think the smart jobs policies of cities like San Antonio, Houston, and Austin centered around clean energy would be the perfect message. 

Unfortunately Perry seems uninterested, either because the corporations and people who have funded him are opposed or because he just doesn’t think Texas has the potential to be a real solar state.  Either way it’s disappointing, and I’m sure that the solar industry would agree. For the first time this fall, the solar industry is bringing its largest business conference to Texas.  Thanks in part to Perry’s solar equivocation, industry (valued at over $38.5 billion globally) may not be sure if Texas is ready for the big time, despite the fact that voters want to see solar in Texas.  For a jobs governor being on the wrong side of businesses that want to bring jobs to Texas and voters who want to see solar power here, it sure seems like a bad place to be, especially when unemployment in Texas is the worst it’s been in 24 years.

Big (REALLY Big) News In San Antonio

Earlier this week I posted a few of the great clean energy stories throughout Texas, with a glancing reference to the exciting work going on in San Antonio.  Almost as soon as the post went up San Antonio’s electric utility CPS Energy (CPS) made an announcement that is truly astounding: because of the increasingly lower costs of solar power and rising costs of fossil fuels, they have increased their bid for a solar power plant from 50 MW to 400 MW.  I’ll let that sink in a little, but I’ll just say this: they mean it.

It’s been fascinating to watch this historical shift over the last several years at CPS (the largest utility of its kind in the nation) from a conventional utility with conventional power plants to a national leader in wind and solar.  It’s a story that is probably worth several blog posts in its own right, and unfortunately we don’t have the space to go into it today.  While cities like Houston, Austin & San Antonio are leading the way on clean energy, the state of Texas is still falling behind.

Charlie Brown And The Football

Source: PBS

When the state legislature wrapped up their session with little help to offer the solar industry and other forms of renewable energy, there were few opportunities left for a stable regulatory framework for renewable energy in Texas.  The best hope was for the Public Utilities Commission (PUC) to enact the goal for non-wind renewable energy in the state set by the Texas Legislature in 2005, which expires today with the deadline to consider the rule proposed in January.  It’s no surprise that the wheels of commerce turn faster than the gears of government, but it’s taken seven years for the PUC to come close to finally enacting this goal and it looks like they’re going to drop the ball again. 

When it comes to clean energy in Texas, it reminds me of Lucy and the football from Charlie Brown: every time the state gets close to creating a market for solar power, they yank the football away again.  The PUC proposed this rule back in January and has apparently decided to back out of it.  Senator Troy Fraser, historically a champion of solar power filed his bill that came very close to passing last session but failed to bring it up for a hearing this session despite being Chair of the Committee the bill sat in.  Governor Perry has championed Texas’ leadership in wind energy as proof that Texas can create good clean energy policy, but sent mixed signals this session, leaving open the question of whether or not he supports solar power or other renewables as he does wind.

Will Texas Be The Clean Energy Capitol?

Businesses can’t operate under that kind of uncertainty, and the solar industry is the fastest growing industry in the U.S.  A handful of Texas cities, like San Antonio, Houston and Austin, are working hard to capitalize on that growth by creating new jobs locally, but without a stable statewide policy, businesses won’t come to or stay in Texas.  Just last week, the U.S. Department of Energy announced $4.5 billion in loan guarantees for solar projects.  Unfortunately, none of the projects are in Texas, though, because the business climate is too uncertain in our state to get solar projects of the scope and scale needed to attract that kind of business. 

In my last blog post I mentioned a company, AETI, with a long history in Texas’ oil and gas industry that has begun to move into the world of renewable energy.  Their CEO, Charles Dauber wrote in May about the need to look forward and not only backward in the search for jobs.  I think his conclusion bears repeating: “While our dominance in oil and gas was dictated largely by location and good fortune, the economic boom that comes with our new energy economy is not guaranteed. We will either be reaping the rewards of the tens of thousands of jobs brought to Texas from renewable energy industries or be importing parts and services from California, New England or locations outside of the United States, including Europe and China.”

In just the past two weeks there have been some exciting announcements from clean tech businesses across the state:

Old Dog Learns New Tricks

First up on the list of new TX success stories is actually a company that’s been established in the oil and gas industry for almost 70 years.  AETI was founded in Beaumont, TX to provide what they call “power delivery solutions” – basically the electrical products, technologies, and services used to connect power generation sources to the users of that power. 

Last Monday, AETI’s Integrated Solar Inversion Station (ISIS™) crossed the final hurdle needed before it can be used by utility-scale solar developers.  The ISIS is the first 1000 volt, 1megawatt (MW) solar inverter approved by a certified test laboratory for use with distributed energy resources.  AETI is a company that, after 60 years in the oil and gas industry, decided to diversify into renewable energy to grow profits and stabilize their business.  To me that sounds a lot like Texas: almost one hundred years after Spindletop, a wind rush started in the state which helped keep electric prices low in the face of rising fossil fuel costs.  As their CEO, Charles Dauber wrote in the Houston Chronicle in May: “I believe that just as my company found strength in realizing its role in our nation’s energy future, so too can the state of Texas.”

Industry Leaders Join Pecan Street Project

AETI isn’t alone: Last week the Pecan Street Project announced the formation of its Industry Advisory Council.  With such household names as Best Buy, Intel, Sony, LG and Texas Gas Service, the formation of this council shows that industry players across the spectrum want to be involved in a cleaner, more secure energy future.  In fact, as these companies will often say, they need to be involved to make sure they stay profitable as the energy industry continues to move in new directions.

Come On In, The Water Is Fine!

Next on the list of exciting announcements (but certainly not least in terms of size) is Baryonyx, a Texas based offshore-wind energy company that took their first step into Texas waters (pardon the pun) by applying for a permit with the U.S. Army Corps of Engineers.  Baryonyx is leasing the state-owned sites from Texas’ General Land Office (GLO), providing much needed income for the state’s Permanent School Fund.  Earlier this week I had the chance to meet with GLO Commissioner Jerry Patterson who feels confident that Baryonyx will have the first offshore wind farm built in the U.S.

(The Best Kind Of) Leadership Struggle

Finally, followers of Texas clean energy industry have known for some time that Austin isn’t the only town vying for Texas’ clean energy crown and the jobs that come with it.  Already the state’s leader in solar with 14 MW and another 30 MW on the way soon, San Antonio recently announced some more great news in the form of not one, not two, but five clean technology companies partnering with the city to bring jobs and clean energy.  Not one to sit on the sidelines as the energy industry continues its shift towards clean technology, Houston continues to attract national attention as a growing hub for clean energy.

For old manufacturing companies and the Silicon Valley set, for cities steeped in oil or just looking to attract new jobs, the clean energy economy seems to be the natural choice to grow a business.  And Texas, America’s oil and gas capital for the last hundred years, has a chance now to be our clean energy capital as well.  Companies like Baryonyx and AETI, and forward-looking city efforts from San Antonio, Houston and Austin’s Pecan Street Project are making sure that Texas is in a position to do just that.