This headline in last week’s Houston Chronicle captured all that is wrong with the Texas electricity market:
Since 2013, when the Operating Reserve Demand Curve was approved, the Texas Legislature has sought to deal with the grid reliability problems caused by renewable energy by increasing intervention in the Texas electricity market. Once hailed “as the most competitive electricity market in the world,” today’s market is a patchwork quilt of regulations and subsidies that almost make the California and New York grids look good. The Chronicle’s headline reminds us that the Legislature’s approach has not changed.
The chart above shows that as federal, state, and local renewable subsidies have pushed more renewables onto the grid, the Legislature has responded by increasing the cost of electricity; most of those costs are the result of subsidies or other benefits for thermal generation and renewable energy sources.
This means that from 2021-23, the Texas Legislature imposed an energy tax on Texans averaging $14.7 billion per year.
What the Legislature should have been doing instead is taking on renewable energy generators by eliminating all state and local subsidies for renewables and making the generators pay for the reliability costs they impose on the grid.
Senate Bill 715 is the first real attempt to make renewable generators pay these costs. It is not perfect; it will likely result in more subsidies for thermal generators. But at least the renewable generators will be paying those costs instead of consumers.
I appreciate Senator Sparks willingness to tackle this difficult challenge and urge the Committee on Business and Commerce and the Texas Senate to do the same.
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