SENATE UNVEILS ELECTRIC GRID REFORM PACKAGE

(AUSTIN) — Members of the Senate Business and Commerce Committee were joined by Lt. Governor Dan Patrick at a press conference Thursday to unveil a package of nine bills aimed at strengthening the electric grid, adding more thermal generation, and providing enough energy to supply the state's fast growing population for the future. Committee chair and Georgetown Senator Charles Schwertner, who is leading the chamber on this issue, said these bills will build on successful reforms from last session by adding much needed generation capacity to the state electric grid. "We have got to address the operational flexibility and resource adequacy needed to power Texas into the future, to make sure that homes are heated and businesses are powered for years and decades to come," he said.

Business and Commerce Committee Chair and Georgetown Senator Charles Schwertner and members of his committee unveiled a legislative package Thursday intended to increase electric capacity and reliability.

At issue is the balance between thermal power and renewable power in the state energy portfolio. Renewable generation has skyrocketed in Texas since 2002, rising from two percent of the state's generation capacity to almost fifty percent today. Wind and solar provide cheap energy, but they are also at the mercy of weather conditions and may not provide needed generation under poor conditions. Thermal generators, like natural gas plants, are more expensive but can provide power to the grid on demand as long as they have fuel. According to Patrick, the current balance leaves the state at risk if renewable sources can't deliver. "We have about 85,000 megawatts available to us today. And about 30,000 of those are wind and solar, mostly wind. On a really bad summer day that's hot or a very cold, icy, freezing, winter day, we need between sixty-nine and seventy-some thousand megawatts of power," he said. "We have 55 to 60 thousand [thermal] megawatts, not enough gas, or coal, or nuclear, not enough if the wind stops blowing and it's night time."

Patrick and Schwertner are among lawmakers who argue that the state needs to make it more economical to build thermal generation, as companies are much more likely to build renewable rather than thermal generation, which they believe threatens electric reliability. "We have to have generation that performs when its critically necessary, and that's dispatchable generation that can be counted on when the wind is not blowing and the sun is not shining," said Schwertner. "You look at the performance of dispatchable and non-dispatchable assets during crises, it is absolutely critical that we re-level the playing field and balance out that market."

The package of bills filed on Thursday would seek to incentivize construction of new thermal generation in a number of ways. The legislation would incentivize construction of a system of backup natural gas generators that would be first to come online in tight demand situations and first to go off when conditions improved, up to ten thousand megawatts worth. It would also create a low-cost loan program, similar to the state's water infrastructure fund, that would help modernize and maintain existing thermal generators.

One measure would seek to end state subsidies to wind and solar generation. Bill author and Weatherford Senator Phil King says that with the state's portfolio approaching fifty percent renewables, it doesn't make sense for consumers to keep subsidizing it. "That may have been necessary and a good idea back in 2001 or 2003 when the renewable market was just really immature, but it's a really mature market today, upwards of 50,000 megawatts of capacity," said King. "There's no reason at all that Texas electricity customers should be paying a state subsidy for renewable energy." Other bills would add consumer protections to the Public Utility Commission's performance credit market plan, cap the total amount of renewable generation in Texas at 50 percent of total generation capacity, and harden the grid against outages and attacks from both foreign and domestic threats.

The Senate will reconvene Monday, March 13 at 2 p.m.

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