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Statement on Balanced Energy for Texas




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The author of this entry is responsible for this content, which is not edited by the Wilson County News or wilsoncountynews.com.
October 19, 2015 | 2,034 views | Post a comment

AUSTIN, TX - Mike Nasi, General Counsel of Balanced Energy for Texas, issued the following statement upon release of the Electric Reliability Council of Texas’s (ERCOT) October 2015 Reliability Report.

“Today’s release of ERCOT’s “Updated Analysis of the Impacts of the Clean Power Plan” builds upon and reemphasizes ERCOT’s long-stated concerns about the impact of EPA’s Clean Power Plan on electric reliability and the Texas electricity market. Balanced Energy for Texas has long-advocated two fundamental principles that the ERCOT report vindicates and which EPA’s Clean Power Plan violates: (1) Texas has no megawatts to spare and (2) EPA needs to leave Texas alone and simply let the market work.

1. NO MEGAWATTS TO SPARE:

ERCOT predicts that the Clean Power Plan will result in the shutdown of at least 4,000 MW of coal-fired generation. ERCOT has found that this “could pose challenges for maintaining grid reliability, and these impacts are likely to intensify and occur earlier when the effects of the [Clean Power Plan] are combined with other environmental regulations.” ERCOT predicts that when combined with other EPA rules, Texas should expect at least 4,700 MW of forced shutdowns. ERCOT predicts that these forced shut downs could result in “periods of reduced system-wide resource adequacy and localized transmission reliability issues.”

What does this mean in layman’s terms? The loss of 4,000 MW to 4,700 MW of power generation means that ERCOT will have to find new power sources to supply at least 2 million to 2.35 million homes (1 MW can power 500 homes) and do this within just a few years. “Reduced system-wide adequacy and localized transmission reliability issues” means statewide rolling blackouts and that in some regions of Texas, Texans will consistently go to flip a light switch or lower the air-conditioning dial only to find that nothing turns on.

2. LET THE MARKET WORK:

ERCOT’s report includes key insights into the potential magnitude of costs that could be thrust onto Texas ratepayers as a result of the rule. ERCOT calculates a baseline 16 percent increase in electricity costs, but it makes very clear that this is just a small component of projected costs. There will be dramatic additional costs associated with the rule that will add to that percentage. Specifically, transmission, fuel, ancillary services, and premature shutdown of valuable assets are flagged as areas that will result in additional costs to consumers. ERCOT emphasizes up front in their report that the cost of building just the transmission lines to bring the electricity from new power sources to Texans will cost over $600 million dollars and take, at a minimum, five years to build.

There is an additional important aspect of the ERCOT report that exposes a key paradox of the Clean Power Plan -- by forcing renewable sources onto the grid so dramatically -- it may actually result in those same renewable sources being turned off or turned down in order to maintain grid reliability. This is because variability of renewable resources means that it is too unreliable at times, so more consistent baseload resources will be operated to ensure reliability. Forcing too much reliance on renewables too quickly goes against tried and true market principles that Texas’ market is based on, distorts the market potentially irreparably, will result in the forced-shutdown of profitable, reliable, and important generation sources, and will interfere with the ability of renewables and other generation sources to be integrated in the market in a long-term.

CONCLUSION:

Some have claimed that Texas should capitulate to EPA’s “Plan” because they say Texas is ‘well on its way to meeting the CPP goals anyway.’ We have one fundamental, and almost rhetorical, question for them: Why would Texas consent to a rule that invades state sovereignty, violates federal statutory and constitutional law, and cedes unchecked authority to federal bureaucrats who expressly flaunt the will of Congress and the states -- - all to bring about a market result they claim will occur anyway?

BET believes that if the market is allowed to work older fossil units will be retired as investments and outstanding obligations are paid off and ratepayers will not be exposed to drastic rate increases often triggered by premature retirements and stranded investments. Texas has no megawatts to spare, and the state must be thoughtful about how we ensure reliable, affordable electricity for growing demand. Thankfully, our grid is in the hands of experts like ERCOT and the PUCT, and not the EPA or those who would have us hand over control to them.”

###

Balanced Energy for Texas is a statewide coalition of energy consumers, producers, and providers committed to supporting policies that preserve and promote our state’s leading role in energy and economic development. For more information, visit www.balancedenergyfortexas.org.
 
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