Texas GOP Proposes Adding 10 GW of State-Funded Natural Gas ... - Natural Gas Intelligence

Texas GOP Proposes Adding 10 GW of State-Funded Natural Gas-Fired Backup Generation - Natural Gas Intelligence

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Texas GOP Proposes Adding 10 GW of State-Funded Natural Gas-Fired Backup Generation

A series of bills aiming to shore up the Texas power grid with backup dispatchable power is progressing through the state Senate, though some legislators fear the size and scope of the proposed rules ultimately will not address the reliability issues.

State Republican Sens. Phil King (District 10) and Charles Schwertner (District 5) introduced a slew of legislation to bolster the Texas power grid. Among others, State Senate Bill (SB) 6 would create the Texas Energy Insurance Program and, which “guarantees ‘steel in the ground’ to serve as the state’s energy policy.”

Under SB6, funds would be used to add 10 GW of dispatchable generation, previously specified as natural gas-fired generation in earlier iterations of the bill. Companies could bid to develop power plants that could sit idle except in the event of an emergency.

Idle Until Rolling Blackouts

According to Texas Senate News, which reports on legislative action in the 88th Legislative Session, the new plants would be positioned throughout the state. The plants would only be fired up to stabilize the grid in the event of rolling blackouts. Schwertner noted that the “insurance generators” would not interfere with the Electric Reliability Council of Texas (ERCOT) and its competitive electric market.

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“This program, with these 10,000 MW, would serve as an insurance policy that Texans can count on…that in times of crisis, it would be there for them,” Schwertner said in late March.

The package of bills overall was met with scrutiny by some state Democratic legislators at the latest state Senate Committee on Business and Commerce hearing.

“I’ve had some concerns from the beginning, and I maintain some of those concerns,” state Sen. Judith Zaffirini (D-District 21) said during a hearing this month. “…One of my concerns is that I still see some of this as reregulation, and I certainly do not want to reregulate. Another concern I have is that we have focused so much on the supply side and not on the demand side.

“And then of course, I worry that some of the bills come across as anti-renewable. And so we want to make sure that we have the dispatchable energy that we have, but not necessarily hurt, not punish renewables and that’s the impression that is made in some of the legislation,” Zaffirini said.

SB6 does not mandate that the added backup generation be powered by fossil fuels. However, if it were to be enacted, the Public Utilities Commission of Texas(PUCT) would give priority to projects that would provide the highest ratio of dispatchable megawatts maintained to project costs.

“Right now the dispatchable generation has to have a run time of 10 hours,” Schwertner said. That is “not generally considered at the level of technology batteries are able to achieve at this time.”

As technology evolves, though, batteries “could participate in the program. The idea is to make sure you have enough run time to deal with the winter events. The summer events are usually fairly short, the winter events can be, as we know, longer lasting.”

Constitutional Amendment?

SB6 goes hand-in-hand with Senate Joint Resolution (SJR) 1, also co-authored by King and Schwertner. The SJR 1, which would require voter approval, would designate the Texas Energy Insurance Fund as beyond the purview of the state’s General Revenue Fund. Only PUCT could access the fund and only to provide loans for building or maintaining dispatchable electric generation facilities. If it successfully hurdles the legislature, a constitutional amendment could be on the state ballot on Nov. 7.

Meanwhile, SB7 also continues through the state Senate committee’s docket. The bill as proposed would incentivize thermal generation development over renewable or intermittent generators by requiring renewables face increased costs of ancillary services.

SB7 would also require wind and solar generators to secure power that is adequate to meet customer demand. That includes whether the wind is blowing or the sun is shining, according to the Texas Senate News.

The package of bills is part of Lt. Gov. Dan Patrick’s 2023 agenda, which includes reforms to the Texas grid.

Last month, Patrick said, “Since Winter Storm Uri, I have been abundantly clear that we need to bring new dispatchable (primarily new natural gas plants) generation online as soon as possible to make sure that Texans have reliable power under any circumstance…

“SB7 addresses market uncertainty and levels the playing field between renewables (windmills and solar) and dispatchable energy by targeting money at the dispatchable assets that we need,” he added.

The Texas Legislature, which meets every other year, is set to adjourn on May 29.

In mid-2022, federal regulators found that natural gas-fired generation contributed to 55% of all unplanned outages across all affected states during the February freeze. Of the 192,818 MW of nameplate capacity bumped offline during Uri, about 106,568 MW of the total was natural gas-fired. Generation that also went offline during the period was wind (41, 541 MW), coal (34,012 MW), nuclear (4,479 MW), other sources (3,350 MW) and solar (2,868 MW).

The extreme weather event, which sent temperatures across Texas plunging into the single digits for several days, resulted in the largest manually controlled load shedding event in U.S. history, according to the federal agencies.

To prevent a complete collapse of the electric grid, ERCOT ordered blackouts across its coverage area, which led to a total of 20,000 MW of rolling blackouts during Uri. More than 4.5 million people in Texas lost power, some for as long as four days. The deaths of hundreds of people were attributed to the blackouts.

Since then, the Railroad Commission of Texas, PUCT and the Federal Energy Regulatory Commission have ordered that the state’s natural gas infrastructure be hardened.

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