Texas Lawmakers Introduce Bill Package Restricting Renewable Energy, Incentivizing Natural Gas Power Plant Construction

Wind turbines are viewed at a wind farm in Colorado City, Texas, on Jan. 21, 2016. (Spencer Platt/Getty Images)

Texas state senators unveiled nine bills aimed at restricting the construction of renewable energy in Texas and incentivizing investment in natural gas power plants.

Lt. Gov. Dan Patrick, along with Republican Sens. Charles Schwertner and Phil King, announced the legislative measures during a press conference at the Texas Capitol on Thursday.

The bills are aimed at improving the state’s energy infrastructure to ensure Texans avoid the massive loss of power that occurred in February 2021. Winter storm Uri left more than 4.5 million Texans without power for days on end and was attributed to at least 246 deaths.

“These legislative proposals set forward the framework that ensures Texans have the reliability, transparency, and security on our power grid that they deserve,” Schwertner said. “Texans must be assured that we have adequate electricity to their homes and businesses under any condition, and these bills, once signed into law, will do that.”

Patrick told reporters that the package of bills is a “product of hours and hours of testimony, days and months of study to come up with what we believe is a plan that will secure our future.”

“This is not a move to a capacity market,” Patrick continued, adding that the lawmakers want to work with the Public Utility Commission (PUC), which is leading the market overhaul, to ensure the state gets more power plants in the ground.

Senate Bill 6 establishes the Texas Energy Insurance Program, which ensures the state has a reserve of “10,000 megawatts of net new generation,” Schwertner said. “Enough to power 7.5 million homes.”

The bill also establishes a low-interest loan program to help maintain and restore dispatchable energy plants in the state. (pdf)

Federal tax credits targeted at renewable energy have created market distortions, Scwertner said, which is what SB 7 aims to balance by requiring those sources to provide dispatchable power to the market when they are not producing. (pdf)

“Reliability comes at a cost, and for too long, that cost has not been shared equally between intermittent and firm generation,” he said. “This bill brings balance back to the market, helps level the playing field by making sure everyone is equally contributing to reliability through instituting a firming requirement.”

SB 2010 and SB 2011 would enhance protections for wholesale electric market abuses. (pdf), (pdf)

Another bill, SB 2012, builds on the PUC’s performance credit mechanism plan by adding provisions to ensure that rate increases are “manageable and go directly toward improving reliability through dispatchable energy,” Schwertner said. (pdf)

Other bills:

• SB 2013 would put measures in place to protect the grid infrastructure from cyberattacks. (pdf)
• SB 2015 would require, beginning in 2024, that at least 50 percent of all new generation built in Texas must be dispatchable. (pdf)
• SB 1287 would cap the amount consumers pay on their monthly electric bill for transmission and distribution when new generation comes online. (pdf)
• SB 2014 would eliminate the direct subsidy from consumers to renewable generation facilities for the power they produce. (pdf)

Subsidies paid by consumers to the renewable market may have been necessary 20 years ago, but today’s market is mature with upwards of 50,000 megawatts of capacity, King said.

“There’s no reason at all that Texas electricity consumers should be paying a state subsidy for renewable energy,” he added.

Patrick and Schwertner said the bills have bipartisan support and that the most important goal is ensuring grid reliability even when the wind stops blowing and the sun is not shining.

“We have to have generation that performs when it’s critically necessary, and that’s dispatchable generation that can be counted on when the wind is not blowing and the sun is not shining,” said Schwertner. “You look at the performance of dispatchable and non-dispatchable assets during crises, it is absolutely critical that we re-level the playing field and balance out that market.”

The package of bills is expected to incentivize new construction of thermal generation and backup natural gas generators that can come online in peak demand situations.