By Robert Bradley Jr. – 23 Aug 2021
Ed. Note: This post from 12 years ago tells of the political origins of the wind power boom in Texas. It’s also the lead-up to the February 2021 Great Texas Blackout. Note that critics of the Texas intervention warned of reliability issues.
“Texas is a nationwide leader in wind power thanks to our long-term commitment to strengthening renewable energy sources and diversifying the state’s energy portfolio.”
– Rick Perry, Texas governor
“Our representatives [in the Texas Legislature] now have less than six weeks to pass the best of nearly 100 bills tabled on clean energy and green jobs. These bills for energy efficiency and renewable energies create the conditions for the reconstruction, repowering and renewal of the economy of our state in difficult times. You will build a sustainable future for Texas. “
– Sierra Club, Environmental Defense Fund, Public Citizen, April 2009
As Russell Gold reported in the Wall Street Journal (April 23, 2009), Texas, which has the toughest renewable energy mandate in the country, will raise its quota for the third time. The new Texas law, the wind capital of the United States, would also make the state a national solar leader.
Expensive and intermittent wind and solar drives will only serve to increase electricity prices for self-consumers and reduce the reliability of the grid. Taxpayers are also on the hook.
In a 2008 study for the Texas Public Policy Foundation, Texas Wind Energy: Past, Present, Future, Drew Thornley concluded:
The distinction between wind and wind energy is crucial. The wind itself is free, but wind energy is anything but. Wind power generation cost estimates typically only include the construction and maintenance of turbines. It omits many of the costs of wind energy – transmission, grid connection and management, and backup generation – that are ultimately borne by Texas electricity tariff payers. Direct subsidies, tax breaks, and increased production and ancillary costs associated with wind energy could cost Texas more than $ 4 billion a year and at least $ 60 billion by 2025.
How did the pervert happen?
The government goes to those who show up. With utility companies financially secure and unwilling to be labeled anti-“green” and principled taxpayer, consumer and market economy groups being largely outmaneuvered, the interventionists have taken power. Full-time environmental activists and lobbyists for rent-seeking private companies have practically unorganized opposition – a scenario of “Bootleggers and Baptists” in the parlance of political economy.
How did Texas, which made consumers the leading oil and gas state, become the nation’s second most politicized energy state (after California)?
The spiral of regulation goes back to Enron, who in 1999 led a provision in the state’s electricity restructuring law (Senate Bill 7, signed by Governor George W. Bush) and established a nationwide mandate for renewable energies. Enron lobbyists had the special interest of Enron Wind Company (now GE Wind) in mind.
It was a double victory for the political powerhouse Enron. First, as the leading electricity wholesaler and aiming to become the leading electricity retailer, Enron coveted mandatory “last mile” open electricity access in the state.
Second, the company needed a large market for its money-losing Enron Wind. The disguise of the two corporate welfare goals under the guise of a renewable mandate brought environmental groups and compliant media on board to get SB 7 across the finish line.
The Texas Mandates 1999/2005
The Texas Renewable Portfolio Standard was originally (SB7) for 2,000 megawatts of new qualifying capacity, but the Texas legislature (SB 20) of 2005 increased the mandate to 5,880 MW by 2015 and a target of 10,000 MW in 2025. Virtually all capacity has was wind power; the prospective (third) mandate would include 3,000 renewable capacities without wind (i.e. solar).
The mechanisms of the mandate are interesting. All electricity providers in the state – whether competitive retailers, municipal utilities, or power cooperatives – must purchase renewable energy based on their market share in energy sales or use a Renewable Energy Credits trading program administered by the Electric Reliability Council of Texas (ERCOT). . For example, a utility company in windy West Texas is selling loans to those who don’t have access.
Incidentally, SB7 also required that at least 10 percent of the annual growth in electricity demand of an investor-owned utility be met by energy efficiency programs – politicization on the demand side. Given the current politicized setup, expect further hikes as well.
The Problem in Miniature: Lobbyist Game
Three environmental lobbyists working in the Texas legislature wrote an Earth Day editorial in the Houston Chronicle entitled “Enact Energy Laws to Clear Air, Create Jobs. They are:
- KEN KRAMER: Director of the Sierra Club’s Lone Star Chapter
- JIM MARSTON: Director of the Environmental Defense Fund Regional Offices in Texas
- TOM “SMITTY” SMITH: Director of the Texas Office of Public Citizen
Here is her something-for-nothing-everyone-wins-on-the-train editorial:
Texas citizens get it.
More and more of us are thinking of turning off the lights, weathering our houses and doing everything possible to save energy. The state legislators can also get it. In this session, they have the opportunity and responsibility to save us even more money on our electricity bills, create thousands of green jobs, and reduce pollution across the state. Our representatives now have less than six weeks to pass the best of nearly 100 laws tabled on clean electricity and green jobs. These bills for energy efficiency and renewable energies create the conditions for the reconstruction, repowering and renewal of the economy of our state in difficult times. You will build a sustainable future for Texas.
The energy efficiency bills include plans to support Texas families by creating jobs while reducing the use of electricity in our homes and buildings. When our homes and buildings are well insulated and our appliances are more efficient, we don’t have to burn wasteful and harmful amounts of dirty fossil fuels for electricity.
An added benefit to creating a new clean energy economy in Texas is that we can purify our air while addressing climate change. Because we create new jobs by installing clean energy technologies, we can reduce the public health risks and costs associated with the effects of burning coal.
The citizens of Texas began making calls for energy efficiency nationwide when we voted with our conscience and wallet to replace millions of our hot-burning lightbulbs with more efficient compact fluorescent lights. Obviously we were up to the challenge then and now we believe we can all do more to help the Lone Star State.
For example, utilities can set more aggressive energy efficiency targets and put in place programs that reduce electricity demand. The bills currently being examined by the legislator require utility companies to expand their energy efficiency programs so that they cover 1 percent of peak electricity demand by the end of 2015 and 2 percent of peak electricity demand by 2020. These goals may seem modest, but meeting them would save 1,176 megawatts of electricity – as much electricity as two coal-fired power plants could produce.
Utilities can also offer home energy audits that show us how to increase our efficiency. Based on these audits, we can seal or replace leaky windows, insulate our attics, repair our ductwork, and install programmable thermostats that allow us to preselect when to use our air conditioners, heaters and water heaters.
Cities can also contribute to energy efficiency by providing up-front funding for energy-saving improvements. In addition, Texas will soon receive $ 327 million in federal stimulus funds for weathering through the Texas Department of Housing & Community Affairs with reporting requirements to create green jobs, save energy and reduce pollution through the use of these funds.
These programs are good for Texas families. They are good for the environment and they are good for the economy. Study after study – including a report completed in December 2008 by the Public Utility Commission of Texas – shows that Texas can reduce its peak electricity needs and growth by 23 percent by implementing a variety of energy efficiency measures. The PUC study also found that every dollar Texas spends on energy efficiency pays off three to one.
But we now need action from Texan lawmakers to unlock the full potential of energy efficiency to meet our state’s energy challenges. This legislature can and should continue the important work that began in the last session when the current House Speaker, Joe Straus, led energy efficiency legislation.
Energy efficiency is the cheapest, fastest, and cleanest way for Texas to meet its electricity needs. The Texan lawmakers who are campaigning for these bills at this session should be thanked for paving the way for a cleaner, more sustainable future. We are now calling on all state lawmakers to swiftly pass these bills through committees and panel discussions to begin our sustainable future.
What about costs the government energy force? Instead of increasing quota requirements, should Texas lift mandates (these are not young industries, but mature industries that have been promising viability for decades)? An obviously tax-hostile, corporate-friendly energy intervention in the post-Enron era deserves a review. A recent study found:
Over the past 10 years, Texas has emerged as a pioneer in promoting renewable energy development. However, the aggressive expansion of wind power in West Texas is likely to drive transmission costs higher [$4.9 billion for starters] for all Texans and create new reliability challenges.
Governor Rick Perry, do you really want Texas to become an Obama energy state? Just because George W. Bush made the mess doesn’t mean you have to end it.
Where will this case study on political capitalism end?
Is it time for free-market, consumer-oriented, taxpayer-friendly parties to face the orgy of “green energy”? Texas lawmakers need counter-education and pressure against people like Ken Kramer, Jim Marston and Smitty Smith.