Texas Lawmakers Want To Use 'Police Power' of the State To Halt Renewable Energy Projects
Senate Bill 388, which has passed the state Senate, would require at least 50 percent of power generation installed after January 1, 2026, to come from "dispatchable" energy sources, which include natural gas, nuclear power, and coal. This bill effectively subsidizes fossil fuel projects by requiring utility providers to purchase power generation credits from dispatchable energy sources.
If passed, this bill could have a "big impact" on the state's power grid, Josiah Neeley, senior energy fellow at the free market R Street Institute, tells Reason. The Electric Reliability Council of Texas (ERCOT), the regulatory agency that manages 90 percent of the state's power market, expects its energy demand to jump from about 94 gigawatts (GW) today to 208 GW in 2030. Renewables are expected to satisfy a significant share of this demand. ERCOT says 346 GW worth of projects are waiting to connect to the grid, 96 percent of which are solar, wind, or battery storage. "If you're saying half of all new stuff has to be gas, then you end up cutting out a lot of new generations," says Neeley.
Senate Bill 715 amends existing statutes to set strict reliability requirements that would favor fossil fuel sources. Under the bill, "solar generators would have to secure enough battery or gas power to match their output at night—a time when no one expects them to produce energy and when demand is typically at its lowest anyway," according to Doug Lewin, a Texas energy expert. A report from Aurora Energy Research estimates that this bill would add $5.2 billion to Texas power prices over the next decade; residents could pay an extra $200 per year in energy costs. The bill has passed out of committee and awaits a vote on the Senate floor.
As these two bills incentivize power generation primarily from fossil sources, Senate Bill 819 would make it harder to permit renewable energy projects. The bill invokes the "police power of [the] state" to "increase electric generation" and "mitigate unreasonable impacts of renewable energy generation facilities on wildlife, water, and land" in Texas. The legislation would require new renewable energy projects that generate over 10 megawatts—enough to power about 10,000 homes—to obtain permits from state regulators before connecting to the power grid. While some cities have zoning requirements, Texas laws currently allow power generators to connect to the grid without a permit.
The bill would also force renewable projects to pay an annual "environmental impact fee" to fund site cleanups of these projects, even though greenhouse gas-emitting energy projects in the state, including oil and natural gas, are not subject to similar dues.
The bill claims to protect private property rights by preventing solar and wind energy projects from being placed within 100 feet or 3,000 feet, respectively, of any property line unless a developer gets a written waiver from every property owner within the area. Neeley says this bill violates private property rights. "These projects can only happen if the property owner agrees and works out a deal in order to do them," he said. Those who object to these renewable energy projects are usually people who live in another part of the state and don't like renewable energy sources, according to Neeley.
Many landowners opposed the bill during a March Senate Business and Commerce Committee hearing. Renewable projects provide supplemental income to farmers and ranchers in many of the state's rural communities, especially as oil and gas reserves have dried up in some counties. A 2023 study from Joshua Rhodes, a research scientist at the University of Texas, Austin, found that, over their lifetime, the state's existing utility-scale wind and solar projects will generate over $12.3 billion in revenue to Texas landowners. Two wind farms in Armstrong County, which has fewer than 200,000 residents, will funnel $100 million to local landowners and school districts.
Despite landowner support for green energy projects and private sector backing, the legislature is doubling down on giving fossil fuel projects a leg up. In 2023, lawmakers enacted the Texas Energy Fund to provide $5 billion of low-interest loans to build new natural gas plants. Despite the incentive, "numerous projects have dropped out of the taxpayer-backed loan program," reports the Houston Chronicle. The legislature is considering amending the program to allow geothermal energy projects to apply for loan funding.
Critics of renewable energy are right to point out that subsidies for solar and wind energy distort markets and are unnecessary and costly. Spain and Portugal's recent blackouts demonstrate the dangers of over-reliance on intermittent green power sources.
However, by putting their thumb on the scale and picking energy winners, lawmakers are running the risk of increasing costs and hurting electricity reliability in Texas. Pablo Vegas, ERCOT's CEO, recently told lawmakers, "The market as structured today is very well suited to support the growth trajectories that we're seeing increase in the state of Texas." In the same testimony, Vegas said that ERCOT will need every energy source to meet the state's projected energy growth.
Using the "police power" of the state ignores what regulators and the market are saying: Texas needs every energy source to meet future demand. That includes renewables.
The post Texas Lawmakers Want To Use 'Police Power' of the State To Halt Renewable Energy Projects appeared first on Reason.com.
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