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Fossil fuel industry failed Texans during the freeze, now it’s using the crisis to attack renewables

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  • Apr 15, 2021
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By Colin Leyden

February’s energy crisis did something no Texas politician has done in decades: It brought Texans together to demand our leaders in Austin fix the flawed energy system that failed so miserably, caused nearly $300 billion in damage and killed more than 200 Texans.

Unfortunately, fossil fuel interests and their willing allies in the Texas Legislature are pushing bills that would have absolutely zero impact on the problems that caused the crisis and would instead place additional costs on producers and customers of electricity generated by solar and wind. The Houston Chronicle called the bills a “cheap shot at renewable energy” and “shameless political opportunism aimed at helping the oil and gas industry profit off Texans’ misery.”

At issue are Senate Bill 1278 and House Bill 4466, companion bills that would force onto wind and solar power generators a disproportionate percentage of ERCOT’s “ancillary service” costs — costs that are currently divided equally among all electricity generators and then passed on to their customers.

Texas politicians spoke loudly and angrily after the grid crisis and promised to identify and address the state’s failure. On February 24, Gov. Greg Abbott gave a rare statewide address, telling Texans: “I assure you of this: this Legislative session will not end until we fix these problems.”

But these bills don’t fix anything, much less the problems that led to the grid meltdown.

Ancillary services had nothing to do with the grid failure, and neither do these bills

A lack of ancillary services did not cause the February crisis. Generators and fossil fuel supply systems failed because they were woefully unprepared for the winter storm and froze. But these bills say nothing about weatherizing natural gas wells, pipelines or generation plants. Nothing about improving insulation and protection of homes from extreme weather or power and water outages.

Nothing about protecting Texans from exorbitant electricity bills.

With only one month left in the legislative session, every minute spent on bills that have nothing to do with the grid crisis is a minute wasted.

The most cynical aspect of these bills is that they were even filed at all during a session where real solutions to the energy crisis are so desperately needed. These bills don’t offer Texans any solutions, they will increase costs to consumers instead.

SB 1278 and HB 4466 will cost renewable generators and customers more

How much more? No one — including the bills’ sponsors — can say for sure. But historically, ERCOT’s ancillary services costs have hovered around $250 million a year. Additional language in the legislation requiring wind and solar to buy back-up generation could run into the billions of dollars a year.

SB 1278 and HB 4466 protect fossil fuel profits at the expense of renewable energy companies and their customers

The coal and gas industry have targeted solar and wind for years, spreading false narratives that the increase in solar and wind have increased ERCOT’s ancillary services costs. But the facts tell a different story: ERCOT’s ancillary services costs have remained relatively flat, while renewable generation in Texas has increased more than 260%.

Simply put, the coal and natural gas industry sees these bills as an opportunity to shave their costs at the expense of their competitors. Moreover, all generators — nuclear, natural gas and coal power plants — need ancillary services, as do large industrial customers. Combined, their need and cost to the system are far greater than wind and solar.

If there is good news to share, it’s that a broad group of stakeholders is speaking loudly against these punitive bills. This week, the U.S. Partnership for Renewable Energy Finance sent a letter to Texas leadership on behalf of its more than 20 members (Berkshire Hathaway Energy, Citi, BlackRock, Bank of America, GE and others) protesting the bills and pointing out the risk they pose to Texas’ reputation as business friendly.

If you haven’t noticed, fewer and fewer companies are investing in natural gas and coal these days. But they are investing in renewable energy because it is the cheapest source of electricity today. PREF points out that punitive bills like SB 1778 and HB 4466 ignore the $380 million in state property taxes renewable energy investments produced for Texas last year and nearly $250 million in rent and royalties to farmers, ranchers and other landowners.

In the wake of the historic energy failure, Texas leaders promised us they would get to the bottom of things and fix the root causes. It’s critical that we hold our leaders to their promises and call out cynical bills like SB 1278 and HB 4466. We deserve real solutions that are fair and meaningful. These bills are neither.

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