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APA Joins Industry, Consumer, and Environmental Organizations to Raise Concerns on Texas Market Reform Proposals

Groups urge Texas lawmakers to focus on key principles that will ensure
reliability and affordability while positioning Texas to continue to be a
leader in a rapidly evolving and expanding global energy economy.

The Advanced Power Alliance (APA) joined the Texas Solar Power Association (TSPA), American Clean Power Association (ACP), Solar Energy Industries Association (SEIA), and Conservative Texans for Energy Innovation in raising concerns about legislation pending before the Business and Commerce Committee of the Texas State Senate.

In a letter submitted to the Committee’s chairman and members, the groups strongly urged the committee to resist the temptation to craft discriminatory measures that would harm
consumers in an effort to incentivize more thermal dispatchable generation.

Specifically, the letter pointed out that this goal can be accomplished without harming the low-cost renewable energy resources that keep the price of power low for consumers and corporate customers, support rural communities and landowners, protect and leverage self-generation, and will power the emerging technologies of tomorrow.

They also urged lawmakers to adhere to a slate of principles, ensuring a non-discriminator market that will deliver the energy affordability and reliability Texas consumers and industry require, while not forfeiting Texas’ ability to lead in emerging areas of the energy economy. Those principles include:

  • Allowing for non-discriminatory, technology-neutral products and services in ERCOT. This will allow for a more efficient, reliable, and cost-effective market.
  • Solving for operational uncertainty, which should be the chief goal for policymakers. Thanks to thoughtful changes made during the 87th Texas Legislature, the ERCOT grid is more resilient and enjoys significantly increased revenue in the wholesale market to support new investment in thermal dispatchable generation.
  • Consider all the factors that cause uncertainty in ERCOT when sizing a product or service. These factors include a combination of load forecast error, unplanned outages from fuel-dependent thermal generation resources, and ERCOT forecast error for renewable generation.
  • Eliminating expensive “firming” provisions from the proposals. Firming obligations will
    unnecessarily increase the cost of power for Texas consumers, result in overbuild of unneeded capacity, and distort the market without any guarantee of increased reliability. This is true in all cases and including all forms of power generation.
  • Recognizing that load is the most appropriate market participant to pay for new products or services. The ERCOT market has traditionally assigned reliability costs to load as the grid is built to serve load, and as load is the beneficiary of increased, system-wide reliability. Other cost-recovery mechanisms will cost customers more money in the end.
  • Maintaining a voluntary Renewable Energy Credit Trading Program. This program has attracted investors to Texas and benefits end-use electric customers without any cost to the state.

The full text of the groups’ letter is available here.