Tag Archives: puc

ERCOT issues warnings due to high winter demand: what does it all mean?

With a high-profile discussion going on at the Public Utility Commission, the Electric Reliability Council of Texas (ERCOT) — which runs the state’s power grid — and among stakeholders about whether or not Texas has adequate electric generation, the sudden warning early Monday morning that Texas was facing a power crisis of sots was literally a blast of cold air. Early Monday morning, with arctic winds affecting virtually all of the state, peak power demand hit nearly 56,000 MW hours — the second highest winter peak demand ever.

ERCOT – seeing power demand come dangerously close to total resources online and available — went into Emergency Action Alert Stage 1, calling on some contracts to reduce energy demand through their Emergency Response Service. Then just a short time later, they went into EAA Stage 2, calling upon other resources at their disposal. The crisis was soon over. Demand went down and a couple of plants that had been off-line went on-line.

What happened was a weather extreme, combined with some inopportune maintenance by some plant owners, and two plants that were expected to be on-line were off-line due to malfunctions caused by the extreme cold. While ERCOT did not announce which two plants scheduled to compete to provide power were off-line, one appears to be a unit at the Comanche Peak Nuclear Power Plant. According to the Nuclear Regulatory Commission, the Comanche Peak nuclear power plant was forced to reduce generation in order to repair a water pump. Luminant, which operates the plant, confirmed the repair but declined to answer questions about other facilities according to Reuters.

In addition to the two plants being down unexpectedly, another 13,000 MWs were down for scheduled maintenance since generally in Texas the winter is a time of  low demand. Still those operating did make some money. According to ERCOT’s website, real time prices hit the market cap of $5,000 for nearly an hour Monday morning, before quickly declining after 9 AM.

The PUC will investigate Monday’s outages to see if protocols were followed, said commission spokesman Terry Hadley, while ERCOT will review its maintenance schedule and also whether the new “weatherization” requirements imposed on generators after the last big freeze in 2011 is actually working.

In the meantime, stakeholders will use Monday’s freeze — and the fact that the state came close to implementing rolling brownouts — as part of the discussion on whether Texas needs to fundamentally change its market structure. On the one hand, the system did work, with ERCOT calling on demand response to reduce demand when resources were stretched thin, and market prices did rise, rewarding generators who were able to meet demand when supply was tight. On the other, many would argue that the lack of new investment in fast-responding natural gas plants is cause for concern as population and demand increases in Texas.

Sierra Club has filed extensive comments in the PUC docket on the issue, arguing that relatively small new services can provide the cushion Texas needs, as we continue to invest in demand response, wind and solar. Implementation of new more efficient building codes, expansion of the utility energy efficiency programs, new more favorable treatment of onsite solar in Texas’s competitive markets, and clearer rules for energy storage resources will lead to more investment in these new more flexible technologies. A full forward capacity market, where all generators and demand response providers are paid a market clearing price for simply having the resource available if needed is not the answer in our view. Market forces should cause many of the older and less efficient — and more polluting — plants to retire, which should send a market signal to build newer more flexible plants and invest more in energy efficiency, onsite solar and demand response.

In the meantime, the discussion at PUC, ERCOT and the Texas Legislature will continue about how to keep the lights on, investment coming and modernize our grid, all while keeping prices reasonable.

Stories From the Frontlines: The Crossroads Between Fracking, Tar Sands, Campaign Finance, and Renewable Energy

How Two Texas Regulatory Agencies Have Embraced Industry Interests Over Citizen Concerns and Public Health

By Dave Cortez and Dewayne Quertermous

This feature was written following two hours of public testimony at an Arlington, Texas town hall regarding the Sunset Review of the Public Utilities Commission and Railroad Commission of Texas – two agencies tasked with regulating electricity, telecommunications, oil, and gas industries, among others. Organized by the Greater Fort Worth & Dallas Sierra Clubs and Public Citizen, the event served as a citizen’s communication forum for North Texans to speak directly to State Representatives Jim Keffer (R-Eastland) and Rafael Anchia (D-Dallas). We thank both of them for their participation.
 
To submit comments directly to the Sunset Advisory Commission, please email sunset@sunset.state.tx.us
 

Last week, more than 80 concerned citizens gathered in Arlington to present passionate testimonials about their experiences with two major state regulatory agencies: the Public Utilities Commission (PUC) and the Railroad Commission (RRC). From concerns about the PUC’s failure to implement state renewable energy mandates and the need to develop net-metering rules for solar, to the financing of campaigns for Railroad Commissioner and the RRC’s track record of neglecting citizen concerns over fracking and tar sands pipeline construction, one unmistakable theme repeated throughout the night was that they are tired of these agencies operating largely by and for polluting industry interests, and not for the public good.

On December 19th, many of these same North Texans will be joining with other concerned citizens from around the state to relay their personal stories of struggle and frustration with the PUC and RRC directly to members of the Sunset Advisory Commission – a 12 member legislative body tasked with the 12 year review to determine the need for an agency, looks for potential duplication of other public services or programs, and considers new and innovative changes to improve each agency’s operations and activities.

(Click here for location, meeting time, and Sierra Club’s comments on the PUC & RRC Sunset Review.)

Keystone 8-24

RULE 37 , EMINENT DOMAIN, AND
Avoiding RENEWABLE ENERGY

Of the more than forty speakers, many criticized the RRC’s lax regulation of the oil and gas industry, especially regarding fracking for natural gas and oil. While there was praise for the Fracking Fluid Disclosure Bill passed in the 82nd legislative session, and the RRC’s quick implementation of the law, as well as a few other fracking related regulations the Commission has strengthened, any positive recognition was always followed by a litany of air, water, public health, and safety concerns.

The Commission’s willingness to let industry have virtually free reign to frequently use the Rule 37 exemption, allowing them to take a mineral owner’s minerals without a lease and with little if any remuneration, came up often throughout the night. A common sore point was that Rule 37 hearings are not held locally but in Austin, forcing landowners to travel to Austin for a hearing that may be rescheduled at the last moment in order to protest what is usually a rubber-stamp approval for the industry.

fracking

Numerous speakers were frustrated by pipeline companies’ abuse of their eminent domain powers, which they get by simply checking a box on a form saying they are a ‘common carrier’. A sustained stream of outraged speakers cited concerns that the RRC does nothing to confirm the veracity of this statement, much less set any criteria for what constitutes a ‘common carrier’, whether associated with gas and oil drilling or with tar sands pipelines. The fact that once they receive ‘common carrier’ status, virtually no limits are placed on the use of eminent domain by a private company, left many incredulous.

“There’s no box to mark or delineate tar sands on the T4 form at the RRC. Tar sands is unlike conventional crude, Syncrude, or Venezuelan crude,” said event organizer Rita Beving. “These tar sands companies get a federal IRS exemption as they have determined with the IRS that dilbit or tar sands is not crude, and therefore are exempt from paying into the U.S. spill liability fund.  Still this company marks their T-4 at the RRC that they are “crude”. What is Texas to do should there be a spill? Who is going to bear the liability? The counties? The state?”

The PUC was not spared by the wave of criticism from speakers. In reference to a petition filed by the Sierra Club and Public Citizen in September, citizens wanted to know why the PUC has maintained a 7-year position that the implementation of a 500 megawatt renewable energy mandate would harm Texas electricity consumers, when many saw it as an efficient means to achieve energy independence and create jobs.

 “The recent denial to hold public meetings for a petition to act on the non-wind RPS, and in documentation on a commission website that compares the capital cost of a natural gas plant to the total cost of a solar PV plant and then declares solar too expensive indicates a bias that needs to be removed or an analysis that needs to be improved,” said Larry Howe of Plano.

CONFLICTS OF INTEREST AND CAMPAIGN COFFERS

Although audience members expressed their frustrations with the PUC’s deference to industry lobbyists and utility stakeholders, the fact of the matter is members of the PUC are unelected and therefore lack sufficient means for public accountability. The 3 commissioners are appointed by Governor Perry – who ironically enough signed Senate Bill 20 into law in 2005, which established a mandate for 500 mws of “non-wind” renewable energy such as solar and geothermal power.

But commissioners at the RRC are publicly elected. Members of Clean Elections Texas were on hand to present testimony highlighting the need to reform the system of financing campaigns for seats at the RRC.

It isn’t just that 1) there’s been an explosion of campaign spending in RRC races in the last ten years, 2) that most of the money comes from people in industries with business before the commission, 3) that commission candidates raise significantly more than candidates for comparable agencies, 4) that there is no limit to how much any single interested party can give to a commissioner, or 5) that most of the high dollar contributions come from individuals in regulated industries…it’s that some of the campaign contributions simply cannot be explained as an effort to affect the outcome of an election,” said Joel Page of Clean Elections Texas.

Further analysis and review of testimony shows that the volume and source of money flowing into campaigns for the RRC – as documented by a 2010 study by Public Citizen – suggests an effort to buy influence over the Commission. Between 2000 and 2010, money raised and spent by incumbent commissioners increased nearly seven fold; in the 2008 cycle, incumbents spent more than 3.5 million dollars. The amount spent by industry sources – energy companies, their employees, as well as consultants, attorneys and lobbyists – has steadily increased as well.

Problem is: campaign finance reports show that much of the money raised by candidates for RRC goes unspent. This begs the question, “why would donors give candidates more money than they need to run a campaign that receives relatively little public attention?”

IMPLEMENTING REFORM AND
MOVING TOWARD A CLEAN ECONOMY

Wind Solar Worker

There’s no doubt that Texas is an oil & gas state. While our economy is rooted in the days of Spindletop and wildcatting for Texas crude, there’s no reason assume that clean air and water are mutually exclusive to economic and energy development. Texans are proud of our rights to personal property, our independence, and the idea that we can lead in more than low-wage jobs and carbon pollution.

But when our appointed and elected leadership at the PUC and RRC fails to listen to legitimate grievances from of its own citizens,  to respect state law, to protect private property rights, to prioritize transparency & accountability, and to tap into the most abundant renewable energy resource in the nation (the Texas sun), prudence dictactes a greater and more vocal response from the people whom these agencies are tasked to represent and protect.

Send in your comments to the Sunset Advisory Commission, and your State Senator and Representative.  Want to build a local clean economy team in your area? Get started by taking 5 minutes to complete this short survey.

There’s no more compelling case for action and reform than your personal story. However, if you’d like to review talking points and more details of the Sierra Club’s and Public Citizen’s comments on the PUC Sunset Review click here. For talking points and more detail on the Sierra Club’s comments on the RRC Sunset Review click here.

Below is a photo essay featuring all of the speakers at the Arlington town hall. Click on photos to see quotes from the testimony given that night.

Cyrus Reed: Low-cost options vs. blackout scare tactics

The following editorial was originally published 16 September 2012 10:30 PM in the Dallas Morning News

In May, the Electric Reliability Council of Texas said electrical generation resources would be tight again this summer, though probably sufficient, and would really start running low around 2014. Subsequently, the Public Utility Commission raised the maximum amount that electrical generators can charge the public at peak times of demand from $3,000 to $4,500 per megawatt-hour to make sure the juice keeps flowing and investors pour into Texas. Now it is considering raising the price again to $9,000 per megawatt-hour and even adding a California-style “capacity” market where generators would be paid for the capacity to produce energy, even when they aren’t actually producing energy, as a way to ensure sufficient resources.
That’s right: Our appointed commissioners are proposing to raise energy prices on homeowners and businesses and pay generators just in case they are needed in order to change market conditions and encourage new investments. But before authorizing an increase in electricity prices or changing our energy-only market, the PUC and other state leaders should look at quick, low-cost options that lower demand at peak times through energy-efficiency programs, solar power and greener buildings.
During two periods last year — a particularly cold February morning and a couple of hot August afternoons — Texas came close to blackouts because there was barely enough juice in the system to keep our heaters and air conditioners running. Now the average consumer’s electric bill could go up by as much as $40 a month.

Ninety-nine percent of the time, there is plenty of electricity to go around, but the PUC is proposing big, expensive changes for the two or three days a year when there might be a problem. Instead, we should focus on programs that will actually reduce demand at peak times.

First, the PUC and ERCOT should change market rules to allow “demand response” — reducing our energy use at peak times by shifting our energy use — to actually get paid by bidding into the market. Essentially, with some rule changes and new software, ERCOT could actually take bids from commercial and industrial entities and even whole neighborhoods that agree to turn down their use of air conditioning or shift their industrial production at peak time.

Second, the PUC must expand required utility energy-efficiency programs. In 2011, the governor signed a bill that requires the state’s nine investor-owned utilities to promote saving energy through energy-efficiency programs, including measures like rebates for new insulation or efficient air conditioners. Since 1999, efficiency programs sponsored by these utilities have reduced demand by 1,365 megawatts — about the size of a large coal plant. Expanding this extremely successful law will reduce energy use and save money.

Third, Texas should adopt new minimum energy codes for new residential and commercial buildings just as Houston has done. The State Energy Conservation Office is now taking public input on whether the state should increase minimum standards from the current 2009 code to the 2012 codes developed nationally. The Energy Systems Laboratory at Texas A&M has analyzed the new codes, and their analysis shows that an average home built in Texas with updated building codes would save up to 40 percent in total energy use and reduce peak demand by up to 18 percent.

Finally, the PUC should implement a law that has been on the books for seven years now — requiring those serving loads to expand their use of renewable energy from sources other than wind like solar and geothermal by at least 500 megawatts by 2015 and consider setting a larger goal of 3,000 megawatts by 2025. Solar helps meet peak demand because it is exactly at the hottest time of the summer when solar power is most beneficial.

Before the PUC raises the price of everyone’s electricity bills to make it more profitable to build new power plants that we’ll only need a few days per year, let’s instead consider these more cost-effective ways to actually save energy and keep our homes cool over the next two years.

Cyrus Reed is the acting chapter director of the Lone Star Chapter of the Sierra Club and may be contacted at cyrus.reed@sierraclub.org.

Don’t Mess With Texas’ Clean Energy

By Sarah Hodgdon, Sierra Club’s Director of Conservation, adapted from Treehugger, 3/8/12

When you think of Texas, what comes to mind? The Alamo? Longhorn cattle? The Dallas Cowboys?

Add clean energy to that list.

“Some might not think of Texas as a hotspot for renewables. But if you look at what cities here are doing, you might have to change your mind,” says Jen Powis, who leads the Sierra Club’s Beyond Coal state-wide campaign in the Lone Star State.

Take Houston, for example: One-third of municipal buildings in the state’s biggest city run on renewable energy. Texas’s second-biggest city, San Antonio, is building 400 megawatts worth of solar. Less than 100 miles to the north of there, municipal buildings in Austin run on 100 percent clean energy.

What’s happening, says Powis, is bottom-up change that flies in the face of the state’s political climate.

“City by city, local leaders are the ones pushing the envelope for clean energy,” Powis says. And as large cities lead the way, other municipalities and universities will follow.

With more than 10,300 MW of installed wind energy, Texas leads the nation in wind power, and there are more than 800 MW of wind under construction. Current efforts to overhaul the state’s transmission lines should ensure even more. Meanwhile coal power has become increasingly unprofitable here.

Powis points out that politicians who oppose clean energy here will also find themselves standing in the way of jobs. The wind energy sector supports more than 8,000 jobs in Texas, according to the American Wind Energy Association(PDF). The state is home to dozens of clean-energy manufacturers, and annual tax revenues from wind projects are in the nine figures.

That being said, the Texas Public Utility Commission has stubbornly blocked solar companies from establishing themselves in this sun-rich region.

“It’s embarrassing to me as a Texan that New Jersey has more solar watts installed than we do,” Polis says. “The PUC and the state legislature have stood in the way of bringing in these good, green jobs. But that can’t go on much longer. Texas is great for solar. In five years, I bet 5,000 megawatts of coal will be replaced by clean energy here.”

You can help make sure clean energy gets the support it needs. Tell Congress to pass strong clean energy financing incentives – including the Production Tax Credit for onshore wind, the “1603″ grants that have created jobs in the solar sector, access to the Investment Tax Credit for offshore wind projects, and credits for efficient manufacturing, homes, and appliances

Texas PUC has Opportunity Next Week to Lead Solar Jobs Creation

Public Utility Commission of Texas Must Act Now to Build Jobs for Texans with Solar Power and other Renewable Energy Sources

 July 8th Meeting is the PUC’s Last Opportunity to Act on January Proposal

The Lone Star Chapter of the Sierra Club, the Texas Apollo Alliance and other advocates of a varied energy supply in Texas call on the Public Utility Commission to act now to approve proposed rules that would implement a 500 Megawatt (MW) target for non-wind renewable power like solar and geothermal energy.   The Texas Legislature approved the 500 MW target in 2005 and the PUC proposed it as a rule January 2011.  With a standard six month deadline for acting on any proposed rule, the July 8th Commissioner’s Meeting next week is the last opportunity for the Commissioners to act on their proposal to implement the 500 MW rule for solar and other non-wind renewable.

Texas Community Colleges Embrace Solar Power

“Texas can meet our energy demand in the coming years and create jobs by strongly promoting clean energy – we’re experiencing a strong trend in that direction,” noted Cyrus Reed, Conservation Director of the Sierra Club. “However, one of the many solutions we need is for Texas Public Utilities Commission to finally implement the proposed and long-overdue rule to build out new resources like solar power and geothermal energy.  There’s no good reason to wait any longer.”

Reed noted that there is approximately some 800 MWs of solar development in Texas that have sought and obtained interconnection agreements through ERCOT, but many of those projects are waiting to see if the PUC creates the market.

Mayor Julian Castro (front, center) and CPS CEO Doyle Beneby (back, left) with Clean Energy CEOs set the bar in their announcement last week of thousands of new clean energy jobs coming to San Antonio

“Some Texas solar power projects are being built – for example by CPS Energy in San Antonio and Austin Energy.  However, a long line of Texas solar power projects want to serve our competitive market and bring jobs to our state, but they’re waiting for the cue from the PUC,” noted Reed. “Passing a strong non-wind renewable standard would create demand, create jobs and do so in a way that doesn’t produce air pollution at a time when air pollution regulations are becoming more stringent.”

Texas is currently losing solar power jobs to neighboring states of Arizona, Colorado, and New Mexico where those states have regulatory mechanisms that encourage clean energy development.

“Electrical contractors in west Texas tell me all the time about solar power jobs that they’re working on in New Mexico where the state is actually promoting clean power projects,” said Dave Cortez with the Apollo Alliance.  “Anyone with concerns about rising costs should look to our neighbor states of Arizona and New Mexico and see that opening up the energy market to renewables can actually lead to both jobs creation and lower costs for consumers.”

For more information or to get involved, contact:  Cyrus Reed, Sierra Club, 512-740-4086 or 512-477-1729 or Dave Cortez, Apollo Alliance, 512-736-7300