AUSTIN (KXAN) — A bipartisan group of Texas lawmakers are pushing back on a plan to revamp the state’s electric market.
Following the February 2021 winter storm and power crisis that left millions of Texans in the dark and more than 200 people dead, the legislature unanimously passed Senate Bill 3, aiming to make the state’s power grid more reliable.
The legislation, in part, directed the Public Utility Commission to adopt policies that would increase “dispatchable generation,” or power that can be turned on and off easily and quickly — especially during a crisis. Since then, the PUC has been considering how to redesign the state’s wholesale electric market.
On Thursday, Sen. Charles Schwertner released a letter signed by all nine members of the Senate Committee on Business & Commerce, expressing their concern about the current proposals being considered by the PUC. The letter stated there was “significant concern” these proposals “not only fail to meet the directives clearly stated in SB 3, but more importantly, will not guarantee new dispatchable generation in a timely and cost-effective manner.”
“Texas needs more electricity with an on-switch — that is there when we need it,” Sen. Schwertner said in a committee hearing earlier this month.
‘Drive towards change’
Just a few days before lawmakers released the letter, the Chairman of PUC and the CEO of the Electric Reliability Council of Texas, which operates the power grid, said they were confident reforms implemented over the last two years would keep the lights on.
However, in a press conference Tuesday, they acknowledged there was still a chance — under certain extreme conditions — of electric conservation alerts or forced power outages. ERCOT CEO Pablo Vegas, in particular, emphasized the importance of the market redesign as a long-term solution for reliability.
“While this risk continues to persist and the risk will continue to grow overtime if we did nothing, I know that we are not going to do that. So, we need to drive toward that change aggressively,” he said.
Earlier this month, an independent contractor assessing the market redesign released a study outlining the various options.
According to PUC Chairman Peter Lake, the preferred option is a Performance Credit Mechanism (PCM), where utilities would purchase “performance credits” from power generators based off their ability to deliver power during times of high demand or stress on the power system. The commission is currently accepting public comment on the study and recommendations.
The lawmakers’ recent letter outlines concerns that this proposal, and others, miss a key part of the directive in SB 3: to establish a “reliability standard” and use that standard when procuring services to reach its goals for dispatchable generation.
It noted that any proposal should include “clear performance requirements” for power generators involved and “strong penalties” for those that don’t comply.
Additionally, the letter outlines some concerns that a new and complex administrative project such as this could deter investments in the ERCOT market and the addition of new power generators — the opposite of the desired effect.
At a Capitol news conference Wednesday, where he laid out his legislative priorities, Lt. Gov. Dan Patrick listed electric grid reliability as his second-most important issue for the session, behind property tax relief.
Patrick is pushing for more natural gas power plants as a way to reduce the risk of rolling blackouts. He said the state should fund incentives to build natural gas power plants, saying they’re more reliable than renewables like wind and solar power.
“Renewables are great, OK. They help keep our air clean. They help lower our rates. But you have to have enough dispatchable that you can count on,” Patrick said. “And one of the ways to do that is level the playing field…. We have to level the playing field so that we attract investment into natural gas plants.”