Austin News

The Texas Senate recently voted 25-6 to pass legislation that requires the Electric Reliability Council of Texas (ERCOT) to direct the cost of backup generation sources to intermittent power producers using wind and solar.

Senate Bill 1278 is sponsored by state Sen. Kelly Hancock (R-North Richland Hills). He testified before the Senate that the intent is to ensure that such intermittent suppliers are the ones paying the cost of ensuring there is sufficient power from on-demand generation sources to meet peak or emergency demands.

"The cost of ancillary services are borne entirely by the consumers right now, even though a significant driver of the costs is the changing performance of intermittent generation sources," Hancock said.

Hancock pointed out how, unlike thermal generators, renewable sources of electricity are intermittent by nature and cannot be relied upon by ERCOT to meet a given demand in all circumstances. Currently, there is no consequence for intermittent generators when they do not produce the expected level of energy. SB 1278 puts the requirement on these generators to pay for the costs they impose on the market instead of passing these expenses along to the consumer.

State Sen. Charles Schwertner (R-Georgetown) testified that intermittent suppliers make the grid less reliable due to the nature of their production methods.

"Intermittent generation is by definition variable, which by definition leads to reliability issues in the grid,” he said. “All this bill does is require that intermittent generation procure the ancillary services to compensate for that variability that they are responsible for in the first place so that we have a reliable grid."

The bill did bring opposition, such as Reed Cyrus of the Sierra Club. Yet, he did not disagree with the core assertion the bill’s supporters made regarding the reliability of wind and solar power generation.

"Yes, I admit there is a concern as we add more and more intermittent generation, the amounts that are needed can change,” he said.

Katie Coleman, a representative for the Texas Association of Manufacturers, testified that "there are undeniable reliability impacts and, in certain instances, threats to the market integrity and structure because of the way that these units (intermittent sources) have historically operated. The thing that we have seen that causes the most concern is that we have come to rely so much on this intermittent generation...the problem is you cannot guarantee that it's there at any given time." 

Coleman noted that it is the volatility issues that Texas manufacturers want to see addressed by Texas government.

Texas has seen significant growth in renewable energy production, with the state accounting for 28% of all wind-generated electricity in the country last year, according to coverage by the Lone Star Standard. With the recent power outages that plagued the state, some critics, such as Energy Alliance Policy Director Bill Peacock, have said that increasing reliance on solar and wind have left the state vulnerable to such events.

While other areas rely on a variety of sources for the heating of homes, Texas homes rely on either electric or natural gas heat, he said. As a result, during extreme weather when generation from wind and solar is lower, the demand on the grid increases.

In addition to placing responsibility for paying for the cost of backup power generation on solar and wind producers, Hancock told the Senate that the arrangement will help ensure against outages and blackouts by making use of market forces.

Senate Bill 1278 has passed in the Texas Senate and has been referred to the Texas House State Affairs Committee.