Texas lawmakers want to put the brakes on the overhaul of the state’s power grid until the Legislature can review and evaluate the proposal.
“It is not in the best interest of our constituents to support any proposal that further delays investments in new dispatchable generation, and the Commission should carefully consider the unintended consequences of any type of proposal that creates more uncertainty for market participants,” said the letter signed by Republican state Sen. Charles Schwertner and the other eight members of the Senate Business & Commerce Committee.
State lawmakers ordered the PUC to develop a reliability service after the February 2021 freeze that broke the grid and left 4.5 million Texans without power. At least 246 deaths were attributed to the statewide outage.
In November, PUC Chairman Peter Lake introduced the proposed market redesign called “performance credit mechanism,” or PCM. It would require electric companies to purchase power using credits that are awarded to power plants that promise to deliver during peak demands.
The proposed model is designed to give the greatest financial benefit to the generators that produce the cheapest power.
“Does your plan guarantee new generation?” Republican state Rep. Todd Hunter asked Lake during the hearing.
“Yes, sir,” Lake answered, adding the goal is to implement the plan by 2026. “I think the PCM is the way to go to guarantee reliability.”
Patrick called for legislation that encourages investments in natural gas power plants to shore up the grid, adding that renewable energy is “a luxury.”
Renewables are a growing source of power in Texas, but generation can quickly drop.
On Monday, Lake acknowledged the need for more dispatchable energy.
“We know sometimes the sun doesn’t shine—every night—and sometimes the wind doesn’t blow, and very quickly, as we experienced the day after Thanksgiving,” Lake said on Monday.
“And because these dispatchable generators are being displaced by wind and solar most of the time, it’s harder and harder for them to stay in business, which is why we want to build the reliability service you directed us to build,” he added.
Energy consultant Ed Hirs said the PCM model is not a solution to the grid problem.
“Capacity markets don’t work very well,” Hirs told The Epoch Times.
Hirs said “we need to keep natural gas and nuclear resources,” but plants are being forced to close because “it’s not a free market.”
“We have set the rules so that generators cannot make any money,” he said. “We haven’t let the generators earn a rate of return.”
Democrat state Rep. Richard Peña Raymond reminded his colleagues during Monday’s meeting to stay focused on a solution since the demand “continues to go up.”
“What I hope, members, is that we can try to figure out how to get Texas to the next step, to the next decade,” he said.
Texas can expect rolling blackouts at least once a year, according to the analysis commissioned by the PUC.
“That threat is real, and it’s happening,” Lake said, adding that “we’re losing megawatts” due to more businesses and people.
