Following the severe winter storm Uri in 2021, Texas Gov. Greg Abbott directed the Public Utility Commission to "take immediate action" in order to improve grid reliability across the Lone Star State.
The Texas Legislature also passed several bills aimed at improving reliability, which Abbott signed into law.
Following the release of the Public Utility Commission's (PUC) plan, the Austin Journal reported that the Texas Senate Committee on Business and Commerce believes the plan did not meet the directives of the legislature.
In a letter signed by all of the committee members, the committee stated that the PUC did "not include any evaluation of the dispatchable ancillary or reliability service directed by Senate Bill 3." Sens. Donna Campbell and Lois Kolkhorst both made public comments indicating their disapproval of the PUC plan and reiterating their concerns over the unreliable and costly nature of the current grid conditions.
"The short answer on legislation [and you can quote this] is that yes, 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," Brent Bennett, policy director, Life: Powered of the Texas Public Policy Foundation, told the Austin Journal.
"Without that cost allocation piece, the mechanism will fail to balance the market and to place a check on the overbuilding of wind and solar caused by federal subsidies, which is causing the need for the mechanism in the first place," he added. "Not that the PCM is all bad, there are good elements to it. But without cost allocation, the reliability deficit in our grid will continue to grow and the PCM will have to grow in order to maintain our dispatchable generation."
State Sen. Charles Schwertner (R-Georgetown) sent the PUC a letter where he strongly voiced his disapproval over its plan for the grid. Schwertner referenced SB 3, a piece of legislation he authored that was passed into law during the previous legislative session in 2021.
He argued that SB 3 "did not direct the PUC to replace the state's energy-only market with an unnecessarily complex, capacity-style design that puts the competitive market at risk without guaranteeing the delivery of new dispatchable generation".
Additionally, the Houston Daily reported that industry groups such as the Texas Association of Manufacturers and the Texas Oil and Gas Association also publicly expressed concern over the PUC's plan.
Research from the Energy Alliance suggests that the PUC's plan falls short of its directives and will increase costs and reduce reliability over time. The report specifically highlights the continuation of major tax subsidies for wind and solar generators and the lack of responsibility they face when they cannot generate the required amount of energy.
According to the report, this could cost Texans nearly $8 billion a year by 2026.