Senate Bill 931 – Abandoning Texas Energy Investors
Repeal of the Renewable Portfolio Standard (RPS) and CREZ Authority
SB 931, which would repeal the RPS (Renewable Portfolio Standard) and eliminate the still-not-complete CREZ program, represents a massive step backward in Texas successful energy policies. The bill harms investors who committed capital to Texas renewable generation fleet and leaves Texas consumers paying for a CREZ transmission system that fails to deliver the full capacity contemplated when CREZ was approved.
Renewable Portfolio Standard
The RPS is a program that has worked successfully. The legislature set a goal of 5,880 MW of renewables by 2015 and a target of 10,000 MWs by 2025. Thanks to more than $26 billion invested in 56 Texas counties, our state met those goals early. In fact, roughly 10% of all electricity in 2014 in ERCOT was generated by wind power.
SB 931 would hurt the investors who made these achievements possible by ending the RPS and significantly devaluing the market for Renewable Energy Credits (RECs). The revenue associated with these RECs forms the basis for the financing of many existing wind projects. For investors who accepted the Texas RPS invitation, a repeal amounts to a retroactive change adversely impacting the investment-backed expectations of parties committing billions of dollars in capital in the Texas economy.
Repealing the RPS serves no public policy purpose and sends a message that is harmful to Texas larger economic development goals. The RPS worked as an economic development tool and diversified the state’s energy mix allowing our state’s consumers to access inexpensive energy, made using Texas energy resources, and no water. We’re relying more on our own energy resources, including natural gas, and reducing our dependence on energy imported from out of state.
Keeping the RPS demonstrates Texas’ commitment to an “all of the above” energy strategy and keeps the state’s successful energy policies working predictably for consumers and investors.
There are currently no plans within ERCOT to build additional CREZ lines in new areas of the state, but the fulfillment of the promise of CREZ is not yet complete. The CREZ in the Panhandle of our state–the area with the richest wind energy resource– has not been completed. This is despite the fact that companies developing wind resources in the Panhandle were asked to put up significant financial commitments to ensure that there would be projects at the end of those lines.
CREZ is already bringing dramatic savings to electricity consumers across the state, adding to grid resilience and stability, and providing needed electricity to support Texas’ oil and gas exploration industries. The vision of CREZ is not fully fulfilled. While the CREZ should not exist in perpetuity, the PUC and ERCOT should continue over time the careful and structured process of delivering the capacity promised when CREZ was conceived. The ratepayers funding CREZ deserve the full benefits of this visionary and massive investment.
Texas Renewable Energy is an Economic Development Tool
Around the world, leading companies are calling for more renewable energy and often base siting and investment on the availability of that power. Apple, AT&T, Bloomberg, Caterpillar, Dell, Dow Chemical, DuPont, Facebook, General Motors, Google, Hewlett-Packard, HSBC, IBM, Ikea, Intel, Johnson and Johnson, Mars, Microsoft, Proctor and Gamble, Samsung, Sprint, Volkswagen, Wal-Mart – these are just a few of the companies who have publicly stated their commitment to renewables.
Keeping the RPS and completing the CREZ demonstrate Texas’ accomplishments and commitment to providing a balanced portfolio of energy resources for Texas industry and consumers. A repeal sends a message that may deter companies wishing to locate in states that encourage the renewable power that they seek to power their businesses.