Market plan

Whatever the electricity market plan, the deck is already stacked against renewables

For nearly a year and a half, seismic changes in the functioning of the deregulated electricity market in Texas have been spreading.

The Texas Legislature ordered the Public Utilities Commission to overhaul the electricity market after the February 2021 freeze and subsequent blackouts forced millions into darkness, killing at least 200 people .

The PUC and the state’s grid operator, the Electric Reliability Council of Texas, have implemented sweeping changes – which the grid’s independent market monitor says could cost customers $1.5 billion until the end of this year. But there’s been little glimpse of the larger-scale changes brewing.

That all changed with the release Thursday of a PUC-commissioned assessment to consider proposals for how the state’s new electricity market will work. Now that the report is public, critics and supporters of the proposal that appears to have the best cost-benefit analysis will only have a month and a half to make their case about what should happen.

But the game is already stacked against any plan that would provide incentives for renewables or next-gen, and has been for almost the entire process.

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Last July, Governor Greg Abbott wrote to the PUC and asked them to create more incentives to develop and maintain thermal energy sources, such as natural gas and coal. He also said he wants renewable energy producers to pay additional costs during times when they are not supplying electricity to the grid. Abbott, it turns out, also named each of the five commissioners of the PUC to their offices.

Along with this letter, the Legislature established a State Energy Plan Advisory Committee to study, among other things, how the electricity market should be redesigned. It was made up of 12 members, including four appointed by Abbott, four appointed by Lt. Governor Dan Patrick and four appointed by Texas House Speaker Dade Phelan, R-Beaumont. At least six of these members work for thermal generators or companies that produce natural gas; one works for an investment bank, the other is a consultant, the other represents an electric cooperative, the other works for the Lower Colorado River Authority and the other owns a consulting company but previously worked for GE Power Systems.

Notably absent from the list: anyone representing renewable energy or battery technology interests.

thumb on the scale

They organized two public meetings, although at the first I was the only journalist present. No press release was sent out informing the public of this meeting – I found this out from a source who was upset that only insiders seemed to be making these the decisions.

The State Energy Advisory Committee ultimately voted 7-5 to adopt the committee’s own report, which recommended against “a market design that favors new or subsidized generation over existing resources, as this could create regulatory inefficiencies and increasing capital costs for Texas taxpayers.

The PUC has yet to approve a new electricity market, and the legislature has yet to weigh in. And the public hasn’t been able to provide meaningful feedback. But from everything that happened behind the scenes, it looks like a thumb was on the scales to discourage the use of renewable energy in Texas.

shelby.webb@chron.com