Senators question whether renewables, intermittent generators should pay for grid changes

In a hearing on Feb. 16, the Texas Senate’s Business and Commerce Committee discussed making major changes to the Texas Energy grid following the disastrous 2021 Winter Storm Uri.

According to the Austin Journal, the Public Utility Commission (PUC) created a plan to overhaul the grid based on the idea of using a Performance Credit Mechanism (PCM). The PCM would reportedly require utility companies and electric providers to buy “performance credits” from generators to pay for power supplied during peak hours of extreme weather. Some senators were skeptic on whether the plan would work.

“Specifically regarding cost causation, should resources that are variable and sometimes not available shoulder some of the cost of their lack of reliability?” Sen. Charles Schwertner said.

During the hearing, Sen. Lois Kolkhorst said there are tax credit programs for wind and solar generators that were evidence of an unleveled playing field due to thermal generators not having access to financial benefits. 

“With tax credits and other incentives, one portion of this portfolio was outside of the free market principles of the other part of the portfolio that was operating differently with a different set of rules,” she said. “The challenge for us is we look at the different models and factor that in.”

Former PUC Chair Rebecca Klein is also an energy consultant, and she answered questions about the benefits provided.

“Certainly the subsidiaries and those intermittent resources has definitely skewed our market prices,” Klein said. “I mean, it’s hard. It’s hard for thermal assets to compete against that. No doubt.”

Both of their comments are much like a conversation from a February committee hearing. Sen. Phil King asked PUC Chair Peter Lake, “if the problem has been that renewables have been growing exponentially faster than thermal, can you explain to me what in the PCM model that thermal will be growing at a rate to overtake that?”

Lake answered, saying, “There’s nothing we can do to stop the federal avalanche of renewables.”

Brent Bennett, the policy director of Life: Powered of the Texas Public Policy Foundation, discussed intermittent generators with the Austin Journal in a February report. He said there are positives to the PCM, but also that “more is needed because the PUC has determined that they do not have the authority to allocate at least part of the cost of the PCM to wind and solar generators.”

Policy director for the Energy Alliance Bill Peacock spoke to the Collin Times about the government’s investment renewable subsidies, calling them “heavy” and that they have been a “big bet” that has not paid off for consumers. He added that the intermittency of renewables causes an increase in electricity costs and reduces reliability.