TEXAS VIEW: The PUC has a plan to fix the Texas grid; legislators need to listen

THE POINT: Extreme weather isn’t the grid’s biggest problem.

Last month, the Public Utility Commission released an analysis about how Texas needs to change its deregulated energy market to ensure we have enough power for future needs.

The criticism piled up, with a focus on the fact that the analysis didn’t account for a freak weather event like the 2021 winter storm.

Criticism about the way the state failed in the run-up to the storm is warranted, but this analysis is the wrong place for it.

Instead, we urge lawmakers and the public to carefully consider what the PUC has put forward, because it represents the most serious look we have at how the state can fix its energy problem.

We aren’t talking about the problem that led to the outages during the 2021 winter storm. It’s actually more severe than that.

During the winter storm, Texas should have had the energy it needed. But state regulators failed to ensure that energy companies had adequately weatherized their equipment. Wellheads and turbines froze. Natural gas plants went offline. That was shameful. Regulators must ensure that it never happens again by holding energy producers to account.

The bigger problem is this: Texas is not going to have enough power for the future unless we do something about the current energy market. That is the problem the PUC’s report is attempting to address.

Texas has done a fantastic job creating renewable energy. We are the nation’s leading producer of wind power. But as more low-cost wind power has come online, there has been less incentive to develop natural gas plants or any other dispatchable power that’s available anytime.

The plan presented by the PUC would create a market incentive for the production of additional dispatchable power through a credit sale and purchase program between electricity generators and retail electric companies. Generators would earn credits by demonstrating they can meet a reliability standard that would meet the state’s energy needs. Retail electric companies would purchase the credits in a public market to supply capital and incentive for generators to invest in more dispatchable power.

In the short run, that new power would most likely come from natural gas. Over time, it could come from battery storage. The plan was devised to be resource neutral, or as PUC chairman Peter Lake put it, “as long as it has an on-and-off switch.”

The plan has a cost of about a half billion dollars a year. That would be shared among consumers at a few dollars a month on the power bill for what the PUC estimates would be a tenfold increase in overall reliability. If anyone has a serious idea how to fix the system at zero cost, we would love to hear it. It doesn’t exist.

So it would be wise for legislators who care about the state’s energy future to set aside a few hours to read this report. It is a smart place to start on how we can make sure Texas has the energy it needs to continue to grow and prosper.

The Dallas Morning News