Austin News

Analyst Jason Isaac said government at all levels shouldn’t choose winners when it comes to energy production and that the 2021 Texas Legislature showed it also believes in the free market process.

“We should eliminate energy subsidies [for all types of energy] and allow the free market to function,” said Isaac, director of Life: Powered at the Texas Public Policy Foundation. The foundation's goal is to “raise America’s energy IQ,” and he is dedicated to that mission.

“Market-distorting subsidies over decades have given renewable energy an artificial financial advantage, to the extent that wind generators are often able to pay the grid to take their power, making it almost impossible for reliable power plants to compete,” Isaac told Austin News. “It’s no wonder Texas has lost reliable generation – a major factor in the February blackouts – even though our population and economy have grown significantly and our demand for electricity isn’t slowing down any time.”

Renewable energy sources account for less than one-third of Texas' energy needs, according to most studies.

Senate Bill 3, which requires power companies to upgrade their facilities to prepare for extreme weather while also forming a statewide alert system for outages, passed and was signed into law. The lessons of February were not lost on lawmakers, Isaac said.

“Winter Storm Uri brought attention to the fact that the growth of new electric generation in our ERCOT [Electric Reliability Council of Texas] grid has favored unreliable generation over reliable thermal generation,” he said. “ERCOT now has an installed capacity of 33% unreliable variable forms of electric generation – solar and wind. During the week of the blackouts, wind and solar only accounted for a paltry 8.5% of our electric demand, while natural gas, coal and nuclear produced 91% of electricity generated.

“With the passage of SB 3, I am optimistic that our public utility commissioners will put rules in place that value reliability first and foremost,” Isaac said. “That will alleviate the problem, but it will take time for the market to respond.”

He said Senate Bill 13 also was an important piece of legislation.

“Not only have the market-distorting policies and subsidies favored unreliable renewables, some of the largest financial institutions have created a cartel to collude against American companies that produce fossil fuels,” Isaac said. “Our greatest legislative victory is Senate Bill 13, which will prohibit companies that publicly boycott fossil fuels from doing business with the state of Texas. This bill sends a strong message to Wall Street investment firms: If you boycott Texas, Texas will boycott you. Our tax dollars will not be awarded to companies who adopt an anti-Texas agenda.”

He said the end of Chapter 313 tax abatements will be a positive development for the Texas economy.

“Absolutely," Isaac said. "And $10 billion of our tax dollars have been wasted on Chapter 313, and we have precious little to show for it. Relieving that burden will be a huge benefit to taxpayers and the broader economy.”

It’s not that tax abatements and subsidies to the renewable energy industry are done in an incorrect manner. They just don’t work as intended, Isaac added.

“The problem isn’t an inefficient process but that tax abatements don’t provide the jobs or tax revenue they promise,” he said. “Extensive investigations by the Houston Chronicle showed that Chapter 313 subsidies, almost 60% of which go to renewable energy, very rarely attracted companies that weren’t already planning to operate in Texas or created the legally required number of jobs.”

Not every bill that Isaac supported passed. Senate Bill 1278, which would have imposed reliability costs on generators who provide “intermittent generation,” came up short.

“It’s unfortunate that SB 1278 didn’t pass, because one of the best ways to ensure a strong grid is making generators take responsibility for the financial cost of unreliable electricity,” he said. “Allowing those costs to be passed down to consumers incentivizes poor business decisions and makes it harder to build the reliable thermal generators [natural gas, clean coal, and nuclear] our growing population and economy need.”

Isaac has insights on the legislative process, having spent four terms as a Republican representing the 9th House District, which includes Hays and Blanco counties in the Texas Hill Country. In 2018 he ran unsuccessfully for the GOP nomination to represent the 21st District in Congress.

He realizes the battle of ideas and energy policies won’t end with this session.

“The Green New Deal isn’t going away and, unfortunately, similar proposals have been proposed at the state level,” Isaac said. “While such extreme proposals aren’t likely to pass, conservatives need to remain vigilant for even minor proposals that capitulate to unscientific climate alarmism.

“You can bet the green lobby will be pushing hard to get renewing Chapter 313 added to the special session agenda, but we’re hopeful Gov. Greg Abbott will recognize the harm this program has caused to Texans and allow it to sunset as the Legislature intended,” he said.