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Top Texas energy official wants step back from wind power subsidy

The head of the state agency that oversees Texas’ electricity utilities says she wants to rethink state support for wind energy.

Donna Nelson, chairwoman of the state Public Utility Commission, said last week she doesn’t want to add to the “subsidization” of the wind industry.

Only a few years ago the Public Utility Commission mapped the routes for $6.9 billion in transmission lines, paid for by the state’s ratepayers, to deliver wind power from West Texas and the Panhandle to the cities in the central part of the state.

Nelson wants federal subsidies curbed and wind developers to pay for system upgrades necessary to improve the stability and the strength of the grid as it brings wind power to market.

The shift at the commission mirrors efforts among conservative-minded Republicans in other parts of the country to cut investments in renewable energy.

Lurking in the background is an old-fashioned energy turf war as industries compete to provide electricity to Texas’ growing appetite.

In 2007, natural gas was responsible for 45.5 percent of energy generated in Texas; wind clocked in with 2.9 percent. By 2013, natural gas had dropped to 40.5 percent and wind jumped to 9.9 percent.

The wind industry in Texas and nationally has benefited from the transmission lines and from the federal production tax credit, which has become a target for congressional Republicans. In 2010, the national wind energy industry received 42 percent of electricity production subsidies and support; natural gas got 5.5 percent.

The subsidies translated into prosperity. Between 2000 and 2010, the annual growth rate in the wind industry, which started off that decade as barely existent, was 32 percent nationally; natural gas’ annual growth was 3.6 percent.

“This is part of a full-court press nationwide to roll back renewable energy,” said Russel Smith, head of the Texas Renewable Industries Association. “Rolling back all government support for renewable energy ignores the obvious — that all energy sources have and continue to receive governmental support in one form and another.”

Texas leads the country in wind energy, thanks to Republican support dating to Gov. George W. Bush, who signed a law in 1999 mandating utilities get a portion of their energy from renewable sources.

“This skirmish here, this talk of additional costs for wind, is largely because it’s cutting into profits of the gas guys,” said Tom “Smitty” Smith, director of the Texas office of the watchdog group Public Citizen.

In 2012, in a sign of the changing tenor, the American Legislative Exchange Council, a nonprofit that promotes business-friendly laws and counts major energy companies among its members, called for states to step away from programs promoting renewable energy.

In an interview, Nelson said she hadn’t been in touch with the natural gas industry about the matter.

“This is all me,” she said.

In the memo to her fellow commissioners Thursday, Nelson said “there can be no doubt that renewable technology — especially wind and solar — are mature industries” and that she opposed extending a federal production tax credit. On the state level, she wrote that wind developers should “have skin in the game” when it comes to upgrading delivery of their electricity to market.

“Should we ask electric customers to fund further investment in the (wind) transmission system to improve stability or should some of the risk be borne by generators?” she wrote.

The tension over wind power subsidies suggests pitfalls on renewable energy for Republican lawmakers seeking higher office.

In his campaign for state attorney general this year, Barry Smitherman largely steered clear of discussing his role as the former PUC chairman who had overseen the adoption of transmission line maps. (He lost in the Republican primary.)

And in a May 16 letter to President Barack Obama, Gov. Rick Perry pointed out that Texas has the most wind power, but left out the massive investment in the transmission infrastructure. That investment will be paid by millions of Texans, in increases of $5 to $10 a month on their electric bills.

“If (the transmission line system) came up today, it wouldn’t be as easy” to pass, said state Sen. Troy Fraser, R-Horseshoe Bay, who authored the 2005 legislation that led to the system.

The right-wing pull of the party and the energy competition is part of the explanation, he said.

But, Fraser added, “it’s good public policy to have diversity in our fuel mix.”

Promoting renewable energy in Texas makes sense because the state has cheap, flat, sunny, windy land and an extensive system of transmission lines, among other things, said Michael Webber, who teaches energy policy at the University of Texas.

“This is not really a state issue,” he said. “This might be chest-thumping.”

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