Grid was not made more reliable during legislative session
…In Austin, lawmakers set out to make the grid more resilient against extreme weather during the legislative session. Calls to “fix the grid” grew louder after hundreds of Texans died in February 2021. The power grid failed under freezing conditions.
In an effort to answer the call, Gov. Greg Abbott recently signed legislation that would incentivize companies to build new natural gas plants with 3% loans and completion bonuses. Voters will decide whether the state should fund this initiative when they cast a ballot in November.
“I am very eager to see the results of a statewide election to enable loans and grants for continuing fossil fuel generation in the state of Texas,” said Beth Garza, a senior fellow at The R Street Institute. “We’ll see if that really materializes. Because at this point, it’s just a good idea. Nothing happens until a statewide election later this fall.”
But gas-powered plants failed during the 2021 freeze. Texas had the supply, but it couldn’t perform. Yet the Legislature did not provide incentives for existing plants to weatherize.
On top of weatherization, Garza said looking at how to reduce demand would have been helpful. Lawmakers could have provided incentives to consumers to conserve energy or improve their homes by installing better windows and insulation.
“I absolutely think that that was a major miss during this legislative session,” Garza said.
Even if voters do decide to fund the loan program when they cast a ballot, power plants take years to build, which means it’ll be a long time before a new one would be contributing to the grid’s capacity.
“Power plants don’t emerge fully formed from waving a magic wand,” Garza said. “They are big pieces of machinery that you have to find a location for, and you have to find a good location that has fuel and access to transmission and water, depending on your power plant. And generally, that development period can be many years to find a location. Once you have the location and the approval to interconnect, it’s generally at least a year, if not two or three, to actually build something. And so this idea that the Legislature can take action, and then we can see the specific results of that action in six months, is not a realistic way to look at this.”
Garza added that this law might actually delay new power plants from coming online by a few months, until interested builders know the results of the ballot measure.
“If I’m a generation developer, and I was really interested, and I see some deficits are in ERCOT, and I think I have my sights on a good piece of land… It’s got good access to water, good access to fuel, access to equipment, I start thinking, ‘OK, I’m going to pull the trigger, and become public, and announce my interconnection at this location.’ Well, this last six months, you’ve had the session talking about, ‘Well, we’re going to get people low-interest loans.’ And why would I go find my own private capital? I think I would, if it were my money or if that were my job, I think I would shift and wait and see what the rules are for getting access to this ‘government money,’ because it’s going to be at lower cost… Or, it may attract new participants into the mix that didn’t have access to their own private capital. It can go both ways, and I think that’s important to recognize,” Garza said…
Both energy experts agree, the bills that passed didn’t make the grid more reliable.
“I look at House Bill 1500, and did it help make the grid more reliable? Nope. I don’t think so,” Jewell said.
“I think our politicians took the steps that they think they needed to take to try to address the catastrophe we suffered. I am not confident that those were the right steps,” Garza added.