PUC moves forward with plans to change how Texas' electric market functions 6

PUC moves forward with plans to change how Texas’ electric market functions

AUSTIN (Nexstar) — On Thursday, the Public Utilities Commission voted to move forward with more changes to improve the reliability of Texas’ power grid.

While much of the focus in recent months has been around weatherization requirements to make sure our infrastructure would be ready ahead of this winter, Thursday’s decision impacts how the electric market operates.

Ahead of the public meeting, protesters gathered at the Capitol before marching a petition with more than 3,500 signatures to the PUC, demanding more transparency and public input.

“They need to listen to the people and they need to have a real public engagement process. We also want them to establish an Office of Public Engagement or public participation,” Shane Johnson with the Sierra Club said Thursday.

Energy experts are also calling for more input, and more analyses, especially when it comes to cost.

“It’s time to tap the brakes,” Tim Morstad with Texas AARP said. “The long-term reforms will have lasting impacts not only to the Texas electric market but to consumers who pay the bills.”

That’s especially important since Texans will already see higher bills due to a law passed in the spring that allows power generators who incurred one-time costs during the February freeze to pass down their expenses to customers over the next 30 years.

“There is a bottom to the consumers’ pocketbook. And every time the Public Utility Commission makes decisions, especially at this level, at the market reform level that are going to impact customer bills, they really need to proceed with caution,” Morstad explained.

Chairman Peter Lake pushed forward with the vote Thursday, though, saying reliability has bumped up in priority after February’s crisis.

“Our market has been historically focused on affordability first, and reliability second. Reliability’s moving up in the ranks of priorities,” Lake said.

The long-term changes to the market, known as Phase II, include plans for backup storage that generators would be able to tap into in future emergencies. The specific plans, though, haven’t been finalized.

With Thursday’s vote, the commission is asking PUC and ERCOT staff to come back to the table by Feb. 15 with more detailed plans and analyses.

“We got to figure out what the specs of the car before know how much it’s gonna cost,” Chairman Lake said. “These cost money. But nothing’s more expensive than losing power again.”

Energy analyst Doug Lewin said cost analysis should have already started, though.

“There clearly should have been more analysis in advance of today,” Lewin said.

There’s also concern that the current plan for backup generation won’t include clean energy resources.

“They’re mostly going to be old plants that we’re about to retire, they’re not making much money, and you’re basically going to pay them to stick around in case you need them. Those are fossil plants. That’s a subsidy for fossil fuels. It, frankly, might be needed,” Lewin added.

Lawmakers previously were criticized for being more lenient toward the oil and gas industry, initially not requiring the same weatherization mechanisms put in place for power plants. They also received big donations from top energy companies.

According to the Texas Ethics Commission, as of June 2021, Texas energy executives have contributed over $4.6 million to Abbott following the February freeze.

Lewin also added he was disappointed the PUC didn’t focus on energy efficiency more in Thursday’s meeting.

“The only thing about energy efficiency in the memo is improved performance of existing programs. That’s fine because we should improve the performance of everything, we should be improving the performance of gas supply. But the problem with the efficiency programs isn’t that they’re underperforming…they’re performing quite well. They’re just tiny,” Lewin added.

“77 gigawatts of demand in February, much of it driven by very inefficient heating systems, and that is not going down. More people are moving to this state. There’s also no reason to think that 2021 was not the worst storm we’ve ever had, there were at least two documented storms that were colder,” Lewin added.

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