Ending Renewables—Not Adding New Regulations—Will Restore Grid Reliability

Testimony Before the Texas Senate Business and Commerce Committee in Support of Senate Bill 715

The headline below 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 dealt with the grid reliability problems caused by renewable energy through increased government 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 Texas 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 energy sources. This means that over the last three years, 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 imposed on the grid.

Senate Bill 715 is the first real attempt to make renewable generators pay these costs. It is not perfect; it may result in more subsidies for thermal generators. But at least the renewable generators will be paying those costs instead of consumers.

I appreciate Sen. Sparks’ willingness to tackle this difficult challenge and urge this committee and the Texas Senate to do the same.