During a recent Texas Senate Business and Commerce Committee hearing on a Public Utility Commission (PUC) energy grid report, Katie Coleman spoke on behalf of the Texas Association of Manufacturers (TAM) and said how this report is attempting to solve grid reliability issues while basing them off of false energy retirement assumptions that will only end up creating more problems down the road.
At the Texas Senate Business and Commerce Committee on Nov. 17, Chairman Charles Schwertner opened the meeting by stating "Today we will be discussing charges related to electricity and blockchain and virtual currencies. First on the agenda is the implementation of Senate Bill 3 and other reforms passed last session to improve the communication, coordination and oversight of the Texas electric grid in the aftermath of Winter Storm Uri...and as to whether or not the E3 RFP and the actions of the PUC are consistent with the direction of the legislature."
"All the reliability issues with installed capacity that this report seeks to solve are a product of this assumption that 11,000 megawatts of generation are going to retire and so if you call into question that assumption you call into question the basis for all of the administratively complex proposals and costs that are being put forth in this. So that is one of our big concerns," Coleman said at the committee hearing. " I think you heard Ms. (Carrie) Bivers (of Potomac Economics of Austin) talk about some of the issues with the assumptions in the report. We share those concerns. The report itself acknowledges it did not seek to achieve a full equilibrium in it its modeling, it essentially just assumed we were going to retire coal and gas and that creates a problem that we have to solve."
According to a press release, last year, Texas Gov. Greg Abbott wrote a formal letter directing the Texas Public Utility Commission to take immediate action to improve the reliability of the Texas power grid. Actions meant to be specifically and immediately taken included streamlining incentives within the ERCOT market to foster the development and maintenance of adequate and reliable sources of power, like natural gas, coal and nuclear power; allocating reliability costs to generation resources that cannot guarantee their own availability, such as wind or solar power; instructing ERCOT to establish a maintenance schedule for natural gas, coal, nuclear and other non-renewable electricity generators to ensure that there is always an adequate supply of power on the grid to maintain reliable electric service for all Texans; and ordering ERCOT to accelerate the development of transmission projects that increase connectivity between existing or new dispatchable generation plants and areas of need.
On Nov. 10, the Public Utility Commission of Texas released a report written by E3. E3 performed a quantitative and qualitative review of a range of proposed market designs that produced the attached PUC report. In summary, this report provides an independent assessment of potential long-term market design reform options to promote the supply of dispatchable generation and focus on reliability as outlined in Phase 2 of the Blueprint published by the Public Utility Commission of Texas (PUCT) in December 2021. Under the direction of the PUCT and its staff, the consulting team of E3 and Astrape Consulting developed and analyzed six specific market design options and compared the impacts of each against a status quo Energy-Only market design.
Life: Powered noted the problems the Texas energy grid is currently facing have been predictable due to an over-investment in unreliable generation and under-investment in reliability measures. More than $60 billion was invested in solar and wind energy generation since 2011 and those sources only produced 1 GW of power during 2021's Winter Storm Uri. Any measures to protect wind and solar are counterproductive if they aren't done in sync with market reforms.
Katie Coleman represents the Texas Association of Manufacturers. The Texas Association of Manufacturers is an organization focused on promoting and protecting a pro-growth business environment and a strong manufacturing sector for Texas. She is a managing partner at O'Melveny's Austin office where she handles complex energy and regulatory matters with a focus on electricity.