Will Texas Legislators Take on Renewable Energy?

“As Texas faces the possibility of high temperatures this summer and the certainty that wind will operate at only a fraction of its installed capacity during periods of peak demand, it is possible the Legislature may adjourn on May 31 having done nothing to address the harm renewables are doing to the Texas grid.”

Despite years of increasing reliance on intermittent generation sources like wind and solar, Texas policymakers seem to have been caught by surprise by the prolonged blackouts experienced by millions of Texans in February.

They should not have been. While temperatures dropped into the single digits for extended periods over much of Texas, solar and wind generators were largely no-shows on the Texas grid.

While other factors were in play, it was renewables that led Texas into darkness. There was the direct effect–lost generation at the peak–as well as the indirect effect–the phantom generation and foregone weatherization upgrades that would have occurred in the absence of government-enabled generation, a story told elsewhere.

However, it does not seem that Texas policy makers learned much from this winter. As Texas faces the possibility of high temperatures this summer and the certainty that wind will operate at only a fraction of its installed capacity during periods of peak demand, it is possible the Legislature may adjourn on May 31 having done nothing to address the harm renewables are doing to the Texas grid.

Texas policymakers made a big show of doing something–anything!–to address the historic blackouts. But most of it only covers up policies they have embraced for 20 years to promote renewable energy. 

Senate Bill 3 Debate

Senate Bill 3 is one example. It’s mostly filled with feel good language calling for studies, reports, and more regulations on an already over-regulated industry. But it contains at least one useful provision. Section 13 requires intermittent resources–wind and solar–to pay for “replacement power sufficient” to maintain reliability when they fail to meet their obligations for the grid because the wind is not blowing or the sun is not shining. Currently, the cost for this is paid for by Texas electricity consumers.

However, this language was stripped by the Texas House. In its place, the House calls for the “costs [of renewables to be] recovered on an equitable and nondiscriminatory basis.” In other words, it is likely under the House language that “all generation sources” will pay for the costs imposed on the system by renewables. Which is the same system we have now. 

SB 3 now moves to a conference committee of House and Senate members to hash out differences in their versions of the legislation. It is possible that the original Senate language holding renewables responsible can be reinstated. 

This will largely depend on what leverage the Senate–particularly senators Kelly Hancock and Charles Schwertner–can bring to the negotiations. The better Senate language is also included in Hancock’s SB 1278, but that has been languishing in the House State Affairs Committee since mid-April.

Repeal Chapter 313 Property Exemptions?

There is one other opportunity for legislators to undo some of the harm caused by renewable energy, as well as roll back some of the $2 billion or so of subsidies and benefits that Texas renewables receive each year from taxpayers and consumers. 

Chapter 313 property tax abatements are used by Texas school districts to give huge tax breaks to big business every year. Over the next 10 years, these abatements are estimated to cost taxpayers about $1.5 billion, about one-third of which will go to renewable energy generators. 

The good news is that Chapter 313 expires next year. The bad news is that there is a bill–House Bill 4242–that will extend the expiration another two or three years. The bill was recently passed by the Senate Natural Resources and Economic Development Committee and sent to the Senate floor. 

Not only did the committee’s chairman, Sen. Brian Birdwell, push this corporate cronyist bill out of his committee, he failed to insert language into it that removes renewable generators’ eligibility to receive 313 abatements–language from a similar bill he filed earlier this year.

Conclusion

The best thing for Texans is if the bill would simply die. However, given the tremendous pressure from supporters of renewable energy and corporate cronyism in big business and the Legislature, that is unlikely.

Politicians seem to have short memories when it comes to public policy disasters they cause–like the winter blackouts. It will be interesting to see if the Legislature over the next week will attempt to restore the loss of reliability caused by renewables. Or whether, politician-like, they act mystified when summer blackouts hit Texas this summer.

An earlier version of this post was published at Excellent Thought: Faith, Policy, and Culture by Mr. Peacock.