Austin News

Although Chapter 313 tax abatements are under scrutiny for how they dole out taxpayer dollars to renewable energy projects that could otherwise be economically unviable, Texas state Rep. J.M. Lozano (R-Kingsville) and Sen. Beverly Powell (D-Fort Worth) have introduced legislation that would extend the program.

“313 abatements overall take money from average taxpayers and give it to big corporations so they end up subsidizing big corporations,” Bill Peacock, policy director at the Energy Alliance, said. “What big corporations are not paying in taxes, average Texans are.”

Powell and Lozano pre-filed bills to extend Chapter 313 through the end of 2032, according to My San Antonio.

“It’s just going to continue to drive unreliability and instability in the Texas electric grid and it's going to get more expensive to deal with,” Peacock told Austin News. “The worst-case scenario is we're going to see blackout situations as there have been in California.”

Lozano and Powell did not immediately respond to requests for comment.

It was widely reported that in 2019 the Public Utility Commission of Texas (PUC) enacted a statewide $3 billion electricity tax.

“The person who carried the Chapter 312 extension last session is Rep. Murphy,” Peacock said of Jim Murphy (R-Houston). “My guess would be that he'll actually carry the bill this time to extend chapter 313. Rep. Murphy is probably the biggest proponent of economic development programs in the legislature because he works for the West Chase Corp., which is an economic development corporation in Houston.”

If Lozano and Powell’s bills are approved by the Legislature, Peacock said he foresees the worst.

“The really big harm is that these local tax abatements encourage the development of wind and solar generation in Texas and the federal government is doing a pretty good job of that too,” Peacock said. “It has created instability and unreliability in the Texas electrical grid and that has cost a lot of money to fix.”

As previously reported by the Lone Star Standard, on Dec. 21, Congress included money to support wind and solar power in its $2.3 trillion omnibus spending bill as well as to extend the Production Tax Credit (PTC) and the Investment Tax Credit (ITC).

“Once again you have something where the money is being transferred from average Texans to big corporations that are making a profit,” Peacock said. “Chapter 313 has multiple problems generally when it comes to renewable energy.”