AUSTIN. Gov. Greg Abbott on Tuesday signaled his support for a controversial proposal to overhaul how electricity is bought and sold in Texas, which aims to address grid weaknesses exposed during the deadly 2021 winter storm.
In a letter to the Public Utilities Commission, Abbott’s board of representatives that regulates the Texas power system, Abbott said it supports grid upgrades that improve system reliability by encouraging the construction of natural gas-fired power plants.
The Grid Regulatory Agency staff and chairman recommended a “performance credit facility” that would require power companies, both public and private, to purchase loans that the state would issue to generators that supply electricity when capacity reserves are at a minimum.
Abbott’s support could change the offer as the Public Utilities Commission is due to possibly approve a market restructuring on Thursday. The proposal has faced significant opposition from network pundits, independent market watcher ERCOT, and several state senators since its introduction in November.
Texas power grid upgrades will affect Texans’ electricity bills. PUC officials estimate the overhaul will cost taxpayers about $460 million a year, up 2 percent overall, according to recent market analysis.
In his letter, Abbott said the PUC should give “serious consideration” to the performance evaluation mechanism. Abbott said manufacturers have already pledged to build new power plants if the plan is approved, likely pointing to testimony from the head of the Texas Competitive Power Advocates power plant trade group.
During a House State Committee meeting on Dec. 5, the organization’s director, Michelle Richmond, said manufacturers would commit to building 4,500 megawatts – enough electricity to power an estimated 900,000 homes – if the proposal was accepted.
“The PCM, if passed by the PUC and supported by the Legislature, will provide that political certainty” for investors so they can build more manageable power plants, Richmond said in a statement after the hearing. Dispatch power in Texas is overwhelmingly at natural gas power plants.
State political leaders such as Abbott and Lt. Gov. Dan Patrick are focusing on developing public policies that will encourage the construction of new natural gas-fired power plants.
The idea comes as the lion’s share of conservative state legislators continue to blame Texas’ power grid problems on the spread of wind and solar power in Texas, despite state and federal reports indicating that natural gas-fired power plants have also come out. out of action during the 2021 winter power outages that killed over 200 Texans.
Renewable energy production has become cheaper, and green energy producers can often sell electricity much cheaper than fossil fuel power plants, leading to an over-investment while solar, wind and large scale batteries are growing. But the energy source is intermittent due to weather conditions.
But even if the Public Utilities Commission follows Abbott’s order, state legislators are expected to reconsider any proposal they make. Despite this, Abbott said “time is of the essence”.
“Texas has new residents and businesses every year, and the demands on the grid will continue to rise,” he said. “I am fully confident that you will be able to meet this new demand by adopting and implementing a new market design that prioritizes reliability and is in line with the directives passed in the last legislative session.”