With Brandy Marty appointed by Gov. Perry to fill the vacant seat on the Public Utility Commission, Texas’ governing body for electricity, the agency has a chance to end its six-month stalemate and solve the state’s electric resource adequacy dilemma. For many months, Texas’ best thinkers have been weighing solutions to the state’s long-standing “energy crunch.” Now, the time to act has come. There is a looming crisis in our electricity system and there is no time for delay. The incoming commissioner has a unique opportunity to push new rules that will modernize Texas’ power grid, cut costs to customers, reduce pollution and, most pressingly, keep the lights on in Texas.
If the PUC doesn’t fix our dysfunctional electricity market, Texas’ grid operator, the Electric Reliability Council of Texas predicts an electricity shortage — making a major blackout all too likely.
Some think adding a capacity market, which would pay power plants simply for existing, is the best way to overcome the Texas Energy Crunch. While a capacity market may incentivize new power plants, if it’s not done very carefully, it could end up paying dirty coal plants millions of dollars more for doing nothing to improve our electricity system. The utility commission should encourage new, fast-starting, clean electricity resources that meet Texas’ needs for peak hours. Adding a capacity market and passing the cost of power plants onto customers isn’t necessarily the best solution for Texans.
Marty will be the deciding vote on issues that have long-lasting, ripple effects in Texas. She should look to customer-focused, demand-side resources, such as energy efficiency and demand response, which rewards those who reduce electricity during peak times and that can be implemented quickly enough to avert our electricity crisis. Doing so will reduce economic, environmental and health costs for Texans and advance the Lone Star State’s position as a national leader in the clean-energy economy of the future.
Demand response enables customers to take control of their energy use and compensates customers accordingly. There are many innovative cleantech firms and utilities with technologies that turn off ‘non-essential’ electricity demand, such as swimming pool pumps and hot water heaters, during summer afternoons when the electric grid is strained and energy costs are high, and then turn them on at night when demand is low.
A report, commissioned by ERCOT, from the Brattle Group shows that Texas could meet and exceed its need for a safer reserve margin using demand response alone. This is a low-risk, cost-effective, customer-focused solution. Not only does demand response pay Texans for energy conservation efforts during high stress times on the electric grid, but it also can be deployed in a matter of months. PJM, the nation’s largest electricity market serving 13 states in the Northeast, implemented roughly 2,300 megawatts of demand response and saved customers over $650 million in energy costs. These savings will be a reality in Texas, if the utility commission fully harnesses denabd response as a resource.
Additionally, energy efficiency upgrades can reduce the energy needed for air conditioning, thereby reducing customers’ electricity bills. Accelerating energy efficiency throughout the state would go a long way toward reducing the state’s power use during the extreme heat of summer — and increasing electricity reserves. After all, Texas established the nation’s first energy efficiency resource standard in 1999. It’s time to revive that effort.
So here’s the bottom line: No one wants to foot the bill for an expensive power plant, and many Texans are eager for fair compensation from reducing their energy use. Retail electric providers, rural electric co-ops and municipal utilities all over the state are beginning to integrate more demand-side resources than ever before. These innovative pockets of Texas can be replicated for the whole state, if the utility acts to correct the barriers in the Texas market.
Now is the time for Marty and her fellow commissions to continue Texas’ leadership in electricity innovation and show the benefits of an energy market that takes advantage of clean technologies, puts customers first and keeps the lights on in Texas.
Marston is director of the Texas office of the Environmental Defense Fundjmarston@edf.org.