Will the Texas Legislature take on renewable energy?

(Originally published in the Houston Daily - May 24, 2021)

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

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. 

However, it does not seem that Texas policy makers learned much from this winter. As Texas faces challenging conditions from high temperatures this summer--and the certainty that wind will operate at only a fraction of its installed capacity, it is possible the Legislature may adjourn on May 31 without having done anything to address the harm renewables are doing to the Texas grid. 

Texas policy makers 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 is one example. It is primarily filled with feel good language calling for studies, reports, and more regulations on an already over-regulated industry.

However, it included at least one useful provision. Section 13 required interment 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 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.

There is one other opportunity for legislators to undo 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 that will go to renewable energy generators. 

The good news is that Chapter 313 will expire 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 currently sits in the Senate Natural Resources and Economic Development Committee awaiting action. 

The best thing for Texans would be for the bill to simply die. However, given the tremendous pressure from mostly out-of-state corporations to renew the subsidies and the tendency of lawmakers to cozy up to such special interests, that may not happen. 

The next best thing would be for the committee’s chairman, Sen. Brian Birdwell, to insert language into HB 4242 that removes renewable generators’ eligibility to receive 313 abatements. He included this language in a similar bill he filed earlier this year. The question now is whether he remains committed to that approach. 

Politicians are good at concocting excuses when it comes to public disasters like the winter blackouts their policies cause. It will be interesting to see if Texas legislators will work over the next week to restore the loss of energy reliability caused by their renewable policies. Or, instead, if they wind up providing more excuses after the Great Texas Summer Blackout. 

Bill Peacock is the policy director at The Energy Alliance.