The Texas Senate Committee on Business and Commerce held a hearing Tuesday on the Public Utility Commission's (PUC) plan to overhaul the Texas energy grid.
During the hearing, PUC Chairman Peter Lake answered questions from the committee while several senators displayed their skepticism over whether the plan would work, pointing out their concerns with the plan's novel nature, its potential increase in electricity costs and its unproven ability to attract new generators to the market.
"Mr. Chairman, I want to believe you, I really do, but it's the first of its kind and we’ve seen some of the first of its kind – sometimes it works, sometimes it doesn’t –and we cannot miss on this," Sen. Lois Kolkhorst said in the committee hearing.
The PUC formally adopted its plan to overhaul the grid in order to ensure reliability in January, centered on the introduction of a Performance Credit Mechanism (PCM), the Austin Journal reported. With several members of the Senate Committee on Business and Commerce expressing concerns over the plan, a letter sent to the PUC claimed it failed to meet the directives given by the legislature.
The PCM would require utility companies and electric providers to purchase the "performance credits" from generators, according to ReformAustin. The credits are used to pay for the power that is supplied during peak hours of demand, often due to extreme weather and a lack of solar and wind generation.
Industry groups have joined senators in expressing their doubts about whether the PCM would work with both the Texas Association of Manufacturers and the Texas Oil and Gas Association (TXOGA) having released statements expressing concern about instituting a novel approach to the grid that had not been tested before, the Houston Daily reported. With these statements, the associations also pointed to the potential price tag attached to the plan, which TXOGA said could amount to $5.7 billion annually.
Sens. Brian Birdwell and Donna Campbell are among those who have joined Kolkhorst in voicing their doubts about the PCM. While Birdwell recognized that the PUC is "in a tough spot," he emphasized lawmakers only get one shot at fixing the grid. Among comments, Campbell repeatedly asked Lake how they could be certain the PCM would work.
"This is novel. This is new. This can be scary. This is risky," Campbell said.
This comes as Brent Bennett, policy director of Life: Powered of the Texas Public Policy Foundation, has previously stated there are positive elements to the PCM, but "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," the Austin Journal reported.