Sen. Bob Hall’s Renewable Bill Shows the Folly of the Texas Senate’s “Energy Insurance Program”

Everyone knows that the Texas electricity grid has problems. And just about everyone knows that the problems with the grid have been caused by government intervention. The question becomes, then, why would Lt. Gov. Dan Patrick and the Texas Senate reveal a plan this week to fix the grid with MORE government intervention?

Of course, they are not alone in their folly. Both Gov. Greg Abbott and the Texas House have successfully pushed for more government intervention in the grid since the winter freeze of 2021. The result? More than $20 billion in subsidies for generators and natural gas companies and, not surprisingly, higher electricity prices for Texas consumers; prices have jumped from about 12 cents per kilowatt hour to almost 14.5 cents. And no increased reliability as wind and solar farms continue to flood the Texas market.

The reason for this folly is that none of our politicians and bureaucrats want to admit that it was their support for market intervention, particularly renewable energy subsidies, that led to worst blackout in Texas history. As a result, they are doubling down on their deception, hoping that if they force Texans to give enough money to electric generators and natural gas suppliers we might not have another statewide blackout.

Unfortunately, the Senate plan does the exact same thing as the Public Utility Commission is attempting to do with its market redesign effort: use consumers’ money to fill the coffers of generators while doing little to improve reliability.

This path has already proved to be a waste of consumer’s money, undermining both competition and reliability in the Texas electricity market. The path to an affordable and reliable supply of electricity is not to take billions of dollars from Texans and give it to generators with multi-billion-dollar market caps. Instead, the way to increase the reliability and affordability of the Texas grid is to shut off the subsidies for all generators–traditional and renewable. Unfortunately, the Senate plan leaves Texas renewable subsidies firmly in place while adding billions of dollars more for the others.

There is some sanity, though, in this conversation. While the recently filed SB 6 and SB 7 (the Senate Plan) will do more good for companies like Berkshire Hathaway than it will for Texas consumers, Sen. Bob Hall’s bill, SB 1752, eliminates many of the subsidies for renewable and traditional generators that have led to the near collapse of the Texas electric grid.

The provisions in his bill include:

• eliminates the ability of counties, cities, and special districts to offer property tax abatements for renewable energy generation, i.e., wind and solar farms
• eliminates the ability of the PUC to designate more Competitive Renewable Energy Zones (CREZ) for the transmission of renewable energy
• prohibits transmission companies from charging consumers for the costs of building and operating CREZ transmission lines. Instead, the cost for building and operating CREZ lines is transferred to renewable generators who have received federal tax credits and use the CREZ lines.
• prohibits renewable generators from selling electricity below $27.50 per megawatt hour
• forces renewable generators to pay for the cost of interconnecting to the grid (currently, consumers pay for these costs for all generators);
• requires the PUC to make renewable generators pay for the losses of transmission of their electricity sold into the market
• eliminates the Renewable Energy Credits (RECs) subsidies under Texas’ Renewable Portfolio Standard.
• prohibits the PCU from mandating a reserve margin. Mandating a reserve margin or otherwise requiring a certain amount of generation in the market (which is what the PUC is trying to do with its market restructuring) would end Texas’ competitive, “energy only” market
• eliminates the PUC’s ability to manipulate market prices by purchasing electricity outside of the market process.

The only way to ensure the reliability and affordability of the Texas grid is to stop politicians from running it. Sen. Bob Hall has given all of us a great blueprint for how to do this.