WEEK IN REVIEW

SENATORS RESPOND TO WARNINGS ABOUT POSSIBLE SUMMER BROWNOUTS

(AUSTIN) — Just one day after state regulators issued a dire warning about the capacity of the state's electric grid, members of the Senate Business and Commerce Committee expressed frustration at the lack of progress on Senate proposals to increase the supply of electricity in Texas. At a press conference Wednesday, Public Utility Commission chair Peter Lake said that there is not enough on-demand power to meet state needs during the hottest days and nights of the summer. Instead, he said, the state will have to rely on wind and solar to make up the difference, and if conditions aren't ideal, that might be a problem. "We're going into this summer relying on wind and solar to keep the lights on in Texas on our hottest days," said Lake. "This is not an operational issue, it is a supply and demand issue. We will continue to use every tool available to keep the lights on and ACs running this summer, but we do not have any control over wind or sun." He further warned that the chance of rolling blackouts on days of extreme heat has gone up. "The risk of brief periods of load shed has increased," he told reporters. "This is the new reality for Texas, this is the first time the available supply of on-demand, dispatchable power has been less than the expected demand."

Committee chair and Georgetown Senator Charles Schwertner was joined by members of the Business and Commerce Committee in expressing concern over the PUC's statement that the state grid lacks sufficient dispatchable generation and risks rolling blackouts on the hottest days of the summer.

Senate leadership argues that this new reality is the result of years of federal subsidies towards construction of renewable energy, encouraging investment in wind and solar while the share of on-demand power has decreased. The Senate has considered and passed a number of proposals intended to balance out this disparity and encourage construction of new thermal power plants, but none of these proposals have yet reached the governor's desk.

One approach passed by the Senate is SB 7, which would implement a firming requirement, which committee chair and Georgetown Senator Charles Schwertner said sounds complicated, but is actually quite simple. "A firming requirement is a reliability requirement," he said. "Firming is a calculation that can be utilized as a tool to allocate cost to whatever we want to allocate it to." SB 7 would allocate more of the cost of ancillary and other reliability services to renewable generators, offsetting the competitive advantage that federal subsidies provide. That bill was heard by a House committee Wednesday. SB 6, which would create a fleet of back-up power generators to come online to prevent rolling blackouts, has yet to be set for a House hearing. Thursday, the Senate passed another proposal to encourage construction of thermal generation, one that would create a zero-interest loan fund for companies looking to build dispatchable generation in Texas, with millions in bonuses for projects completed by the end of 2026.

Multiple members expressed frustration at how little progress has been made towards increasing dispatchable energy generation as the session nears its May 29th deadline. "We were saying this 10 years ago in 2011 after the winter storm then, but nobody was willing to pay extra for the reliability," said Jacksonville Senator Robert Nichols. "But after Uri - billions in damage, hundreds of people dying - we’ve got to do it."

There are just over three weeks left in the session, and committee members were keenly aware that there is little time left on the clock. "I don't think we dare go home unless we can guarantee to the people that sent us here that there's going to be a whole lot more dispatchable generation built, and built as quickly as it can be," said committee vice-chair and Weatherford Senator Phil King. "We're all going to be here in July," said Brenham Senator Lois Kolkhorst, previewing a potential special session on power generation should the Legislature fail to act in time. "When the brownouts happen we're going to be sitting here trying to pass bills that prevent brownouts." Lawmakers have until Memorial Day to avoid that.

The Senate will reconvene Monday, May 8 at 11 a.m.

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